Gains-from-trade Theory

Gains-from-trade theory in Global Commerce Policy

In this regard, a definition of this issue is as follows: that part of the theory of international economic relations which demonstrates that two countries with different price structures are maximizing their economic returns if they trade with each other rather than pursuing autarky. The gain lies in the ability of either country to buy more at a lower cost from the other than it would be if it attempted to be self-sufficient. The consequence is specialization in production. See also absolute advantage, comparative advantage, Heckscher-Ohlin theorem, globalization, international division of labour, internationalization, self-reliance and self-sufficiency.[1]

Gains-from-trade theoryin the wold Encyclopedia

For an introductory overview on international trade policy, see this entry.

Resources

Notes and References

1. Dictionary of Trade Policy, “Gains-from-trade theory” entry (OAS)

See Also