Ricardian Model of Trade

The Ricardian Model of Trade is developed by English political economist David Ricardo in his magnum opus On the Principles of Political Economy and Taxation'(1817). It is the first formal model of international trade. Before Ricardo, the benefit of has already been propounded by Adam Smith. Ricardo strengthens the case for free trade by giving it a theoretical framework based on the logic of comparative advantage. This concept is of such historical importance in the field of economics that when Nobel laureate Paul Samuelson was once questioned by a self-important mathematician to "name one proposition in all of the social sciences which is both true and non-trivial, he responded confidently, "comparative advantage."

(to be continued soon.)