Related Web Links – Module 4  - Comparative Advantage and Trade

When looking at the issue of trade and comparative advantage, a wealth of information can be found with the Department of Commerce.

Go to: http://www.commerce.gov/

When looking at the global economy, an excellent place to start is with the CIA Factbook. The Factbook provides many details about the economic, political, and demographic characteristics of each country in the world.

Go to: https://www.cia.gov/library/publications/the-world-factbook/index.html

The United Nations Human Development Report (HDR) looks at long-term trends in changes in wealth and income across the world’s nations and trends within countries. In the past, the report has concluded that global income inequality has increased over time with the major benefits of trade and development going to the wealthy countries.

Go to: http://hdr.undp.org/

It is a good idea to complement the U.N source with a critical evaluation by Columbia University professor Xavier Sala-i-Martin who finds fault with the HDR’s methodology and conclusions. Martin finds that when using each person as an observation (rather than a country), global income is converging for the majority of the world’s people.

Go to: http://www.columbia.edu/~xs23/papers/worldistribution/Economist%20March%202004.htm

Comparative advantage is determined by a significant number of factors. Labor wages are important, but so are the skills and education of the workers, the nation’s infrastructure, and associated costs of hiring workers such as the presence of a nation health care system.

As the only industrialized country in the world without universal health care offered to all of its citizens, firms that produce in the United States must pick up part or all of the cost of health care coverage for their employees (if it is offered). In the past decades, health care costs have risen much faster than the inflation rate and now firms include health care costs as part of the decision as to where production is located. Krugman considers the importance of these issues for Toyota in this New York Times article:

Go to: http://www.pkarchive.org/column/072505.html