I, Peach: a lesson in comparative advantage

In the real world, of course, the complexity of trade defies comprehension, as countless millions of goods and services are produced, exported, and imported seemingly in defiance of any clear pattern. Yet, an underlying pattern is there, and it remains basically the same one described in its essence by Ricardo two hundred years ago.

There are many models of international trade, but the theory-du-jour is Ricardo’s comparative advantage. If Country 1 is more efficient at producing Good A compared to Good B than Country 2 is efficient, Country 1 should focus on producing Good A and Country 2 Good B. I, Peach gives an excellent overview.