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Full-Text Articles in International Economics
A Two-Round In-Class Trading Game On The Principle Of Comparative Advantage And The Theory Of Reciprocal Demand, Bei Hong
Research Collection School Of Economics
This paper outlines a classroom trading game that explores equilibrium terms of trade using the principle of comparative advantage and theory of reciprocal demand. Students are divided into eight groups. Each group is assigned a country with hypothetical productivity and each country seeks its trading partner based on comparative advantage. Students simulate the trading of goods between countries with the objective of achieving the best possible terms of trade. The game encourages students to reflect on their learning of the principle of comparative advantage, consider improvements in trade terms through negotiation, and summarize the conditions for mutually beneficial terms of …
Trade And Divergence In Education Systems, Pao Li Chang, Fali Huang
Trade And Divergence In Education Systems, Pao Li Chang, Fali Huang
Research Collection School Of Economics
This paper presents a theory on the endogenous choice of a country's education policy and the two-way causal relationship between trade and education systems. The setting of a country's education system determines its talent distribution and comparative advantage in trade; the possibility of trade by raising the returns to the sector of comparative advantage in turn induces countries to further diferentiate their education systems and reinforces the initial pattern of comparative advantage. Specifically, the Nash equilibrium choice of education systems by two countries interacting strategically are necessarily more divergent than their autarky choices, although the difference is still less than …
Education And Trade, Pao Li Chang, Fali Huang
Education And Trade, Pao Li Chang, Fali Huang
Research Collection School Of Economics
This paper examines the inherent link between a countryís education system and its comparative advantage in trade. It suggests that di§erences in education systems across countries are probably a stable equilibrium result that is compatible with and reinforced by trade patterns. In equilibrium, two distinct types of countries emerge, one that exports creativity-intensive products and has an education system encouraging diversity (as illustrated by the US), and the other one that exports high-quality manufactured products and has an education system promoting homogeneity in student quality (as illustrated by Japan). Our Öndings present a novel explanation for the coexistence of low …