Specialization in Trade
Of the numerous articles that I reviewed, the one thing that they all implied was that the gains from trade are as a result of the specialization in production of goods. Some of the articles I found praised the theory of comparative advantage. If a country is more efficient in the production of one good than any other good, then it should focus on the production of that one good and import the other commodities that it wants. Also productivity levels in relation to how much is invested in an industry as well as how much technology you have. Some argue that in order for the theory of competitive advantage to work, labor capital and technology must not move beyond the borders of that country. The absolute advantage of cheap labor in other countries promotes outsourcing of labor in American industry respectively taking over from competitive advantage. Some countries have an overall absolute advantage in trade when compared to other countries.
The most......
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