Comparative advantage

In economics, the theory of comparative advantage explains why it can be beneficial for two countries to trade, even though one of them may be able to produce every kind of item more cheaply than the other.

External links

• David Ricardo's The Principles of Trade and Taxation (original source text)
• Ricardo's Difficult Idea, an economist's exploration of why non-economists don't understand and won't take seriously the idea of comparative advantage
• Further study notes on comparative advantage