Comparative advantage, economic growth and free trade


  • Julio Lopez Gallardo UNAM, México


comparative advantage, trade, growth


The paper has two objetives. The first is to discuss whether developing countries can benefit by specializing according to their comparative advantage. The second objetive is to discuss if an economy that adopts a free market policy will in effect achieve greater economic efficiency. The author concludes that specialization according to comparative advantage would indeed benefit a country. He also argues that in an economy ruled by free competition and without governmental interference, market signals and forces and not by themselves sufficient to provide the necessary incentives to producers so that they fully use the avaliable resources, and produce and trade according to comparative advantage.