Economics of Protectionism and Comparative Advantage

The basic concept of scarcity is not limited to economics, and can be found in other scientific fields as well.

Economics doesn't have exclusive rights to using the concept of scarcity as its foundation.

Individuals often reside in large metropolitan areas, embrace diversity, and are comfortable with global integration and immigration.

Individuals who typically live away from major cities, feel left behind due to factors including globalization, and often show resistance to immigration.

The feeling of being left out and disadvantaged due to factors like economic decline and cultural change, often linked to globalization and immigration.

A model used to analyze the impact of trade policies on different sectors of an economy, focusing on the distribution of benefits and losses. It examines how trade affects workers in exporting and importing sectors.

A situation where a country imposes tariffs on imports from another country, without any retaliation from the other country, potentially leading to a gain in aggregate consumption but unevenly distributed benefits.

A scenario where both countries involved in a trade dispute impose tariffs on each other's imports, resulting in reduced overall consumption and economic losses.

A situation where a country restricts trade and becomes more self-sufficient, potentially leading to economic losses due to reduced efficiency and higher prices.

The belief that the lack of engagement with the broader population by those who benefit from globalization, combined with the feeling of being excluded and left behind, can create divisions and tensions within societies.

The distribution of the economic burdens and benefits of protectionist policies across different skill levels. High-skilled workers suffer, while low-skilled workers may benefit in the short term.

Protectionist policies can create political support even if they harm the overall economy, because some groups benefit while others suffer.

Empirical research by Fajgelbaum et al. (2019) found that import tariffs disproportionately benefited politically competitive counties, with workers in Republican counties being the most negatively impacted by retaliatory tariffs.

The traditional theory of comparative advantage assumes that resource endowments, skills, and technologies are fixed, not considering how they can change over time.

The ability of a country to produce goods or services more efficiently than others due to its available resources, skills, and technology.

Changes in a country's comparative advantage over time, driven by factors like technological advancements, education, and investment in specific skills.

Focusing on investing in specific technologies and skills to build long-term competitive advantage.

The development of China's economy over the past decades illustrates how a country can change its comparative advantage from low-skilled production to more sophisticated industries.

A legal system where rules are created, adjudicated, and enforced by private entities rather than a state or government.

A situation where multiple entities (like nations) lack a central authority to enforce contracts or agreements, leading to potential conflicts and difficulties.

The right of individuals to own and control themselves, excluding them from being enslaved or forced into servitude. Essential for labor contracts and free markets.

A medium of exchange that allows for easy trade and transactions, replacing the need for direct barter.

The idea that money has no intrinsic value but represents a promise to be converted into goods and services, making it a social convention.

The simultaneous need for two individuals to want what the other has in order to trade. Money solves this problem by acting as a common unit of exchange.

The ability for money to be saved or stored for future use, allowing people to defer consumption and plan for the future.

The process of exchanging goods and services without using money, requiring a direct exchange of items.

The excessive exploitation of marine resources, particularly cod, resulting in a decline in fish populations.

A period of significant decline in the cod population, leading to a near-complete collapse of the Atlantic northwest cod fishery.

The ability of cod to reproduce at a high rate, once thought to prevent depletion of the population, was ultimately insufficient to counter the effects of overfishing.

Technological advancements in fishing techniques, such as more efficient nets and fishing vessels, led to an increase in catch and contributed to the overexploitation of cod stocks.

The impact of overfishing extends beyond the targeted species, disrupting the entire marine ecosystem and affecting various other populations.

The Peruvian anchovy, another important fish species, also faced a near-collapse due to overfishing in the 1970s, highlighting the global problem of overexploitation of marine resources.

A 2008 UN report suggested that reducing the size of the worldwide fishing fleet by half could be necessary to ensure sustainable fishing practices and prevent further depletion of fish stocks.

A state of overfishing where a particular fish population becomes depleted to the point where recovery is unlikely without significant intervention and conservation efforts.

Companies voluntarily integrating social and environmental concerns into their operations and stakeholder interactions.

The belief that companies should prioritize profit maximization within the boundaries of legal and ethical rules.

A theoretical framework where all markets are perfectly competitive, leading to zero long-run profits. In this system, companies are incentivized to maximize profits to stay afloat.

The idea that under perfect competition, companies have limited room for social responsibility actions like higher wages or lower prices, as these actions would likely lead to losses.

The idea that social responsibility concerns should be addressed through well-designed institutional frameworks like property rights, regulations, and taxes, rather than relying on companies to voluntarily incorporate them.

The belief that corporate social responsibility and profit maximization are not necessarily conflicting. Companies can engage in socially responsible activities while still achieving profitability.