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Last Updated on May 30, 2021

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Nov 07, 2020

Economists have understood since the Victorian era that the main benefits of trade come from comparative advantage: the idea that people can specialize in what they're good at and then benefit from exchange. The principle is no more mysterious than specialization in the labor market.

Cooking
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Nov 07, 2020

There's a reason I write articles and go out for good dinners: because I'm better at research than cooking. And there are people who are much better at cooking than research, so it's mutually beneficial for us to specialize.

Because
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Nov 07, 2020

The U.S. tends to export high-tech goods because we have strong comparative advantage there, and we tend to import labor-intensive and less skill-intensive goods that other countries can do more cheaply.

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