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Free Trade under FireFifth Edition$
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Douglas A. Irwin

Print publication date: 2020

Print ISBN-13: 9780691201009

Published to Princeton Scholarship Online: January 2021

DOI: 10.23943/princeton/9780691201009.001.0001

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PRINTED FROM PRINCETON SCHOLARSHIP ONLINE (www.princeton.universitypressscholarship.com). (c) Copyright Princeton University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in PRSO for personal use.date: 18 September 2021

The Case for Free Trade

The Case for Free Trade

Old Theories, New Evidence

(p.35) 2 The Case for Free Trade
Free Trade under Fire

Douglas A. Irwin

Princeton University Press

This chapter examines the economic logic of free trade and recent empirical evidence reinforcing the case for it. It mentions Adam Smith and David Ricardo who have described the gains from trade in a systematic way many centuries that made economists of today urge for higher income that results from improved resource allocation as the main advantage of trade. It also explains how trade not only helps to improve the allocation of existing resources but also makes those resources more productive. The chapter talks about the productivity gains from trade that are sometimes neglected but appear to be substantial. It also points out the importance of welfare benefits of a greater variety of products that resulted from trade.

Keywords:   economic logic, free trade, Adam Smith, David Ricardo, resources, productivity gains, welfare benefits

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