Comparative Advantage Vs. New Trade Theory 

Read Carbaugh (2017), Chapters 2 & 3 (attached) , and view Paul Krugman’s 2008 Nobel Prize speech. (link below)

In a critical essay, compare and contrast the theory of comparative advantage as presented by Carbaugh (2017) with Krugman’s (2008) critique of comparative advantage (also known as new trade theory). Examine the implications of factor endowment theory in the case of trade between countries with different endowments (e.g., different endowments of labor and capital). Assess the aims of Saudi Vision 2030 in relation to factor endowment theory and new trade theory.

Directions:

  • Your essay is required to be 4-5 pages in length, which does not include the title page, abstract or required reference page, which are never a part of the content minimum requirements.
  • Support your submission with course material concepts, principles and theories from the textbook and at least three scholarly, peer-reviewed journal articles. Use the Saudi Digital Library to find your resources.
  • Use Saudi Electronic University academic writing standards and follow APA style guidelines.
  • Review the grading rubric to see how you will be graded for this assignment.

 

Required

  • Read Carbaugh (2017), Chapters 2 & 3 (attached) , and view Paul Krugman’s 2008 Nobel Prize speech.  (https://www.nobelprize.org/mediaplayer/?id=1072&view=1)
  • Albassam, B. A., (2015, June). Economic diversification in Saudi Arabia: Myth or reality? Resources Policy, 44, 112-117. (attached)
  • Freund, C., & Moran, T. (2017). Multinational investors as export superstars: How emerging-market governments can reshape comparative advantage (Peterson Institute for International Economics Working Paper No. 17-1). Washington, DC: Peterson Institute for International Economics. (Attached)

Recommended

  • Rendall, M. (2017). Brain versus brawn: The realization of women’s comparative advantage. (University of Zurich, Institute for Empirical Research in Economics, Working Paper No. 491, Revised version). Zurich, Switzerland: University of Zurich, Institute for Empirical Research in Economics.(attached)

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