The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Comparative Advantage

  • Ronald Findlay
Reference work entry


This article traces the evolution of the theory of comparative advantage and the gains from trade from the pioneering work of David Ricardo to the factor proportions approach of Eli Heckscher and Bertil Ohlin. Extensions of the basic models to many goods, factors and countries, and to the long run are noted, as well as the attempts at empirical testing of the predictions derived from them.


Absolute advantage Comparative advantage Corn Laws Distributive justice Division of labour Factor price equalization Factor proportions Fixed factors Free trade Gains from trade Haberler, G. Heckscher, E. F. Heckscher–Ohlin trade theory Human capital International trade Intra-industry’ trade Labour mobility Leontief, W. Lerner, A. P. Monopolistic competition Neoclassical general equilibrium theory Ohlin, B. G. Product differentiation Returns to scale Specialization Specific factors Stationary state Stolper–Samuelson theorem Terms of trade Time preference Wages fund 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Ronald Findlay
    • 1
  1. 1.