Different Trade Theories Developed Overtime.
Title: Different Trade Theories Developed Overtime.
Category: /Business & Economy
Details: Words: 578 | Pages: 2 (approximately 235 words/page)
Different Trade Theories Developed Overtime.
Category: /Business & Economy
Details: Words: 578 | Pages: 2 (approximately 235 words/page)
Trade Theories developed overtime
First trade theory was developed during the period 1500-1800 by the group of writers called mercantilists who found that with the help of foreign trade, nation can regulate its domestic and international affairs. According to the mercantilists, if a country could achieve a surplus of exports over imports then it will raise the domestic output and employment of the country. But, later on this theory was not successful to hold as
showed first 75 words of 578 total
You are viewing only a small portion of the paper.
Please login or register to access the full copy.
Please login or register to access the full copy.
showed last 75 words of 578 total
economist Eli Heckscher and Bertil Ohlin formulated their own theory called factor-endowment theory. In this theory Heckscher and Ohlin states that comparative advantage is explained exclusively by differences in relative national supply conditions. This theory focuses on the role of nation's resource endowments such as labor and capital as the key determinant of comparative advantage. This theory explains what Ricardo didn't explain in his theory that's why this theory holds as a true trade theory.