G7

• Comparative Advantage


  An economic principle that explains how countries, businesses, or individuals can benefit from specializing in producing goods and services they can produce most efficiently
• David Ricardo formulated the theory of comparative advantage in his book "On the Principles of Political Economy and Taxation"


  1817
• Comparative Advantage


  • Built on the ideas of Adam Smith, who advocated for the benefits of specialization and free trade
• Opportunity Cost


  The cost of forgoing the next best alternative when making a decision
• Absolute Advantage


  Being able to create more or better goods and services than someone else
• Comparative Advantage


  The ability to create goods and services at a lower opportunity cost—rather than necessarily at a higher volume or quality
• According to the Law of Comparative Advantage, a person or a nation should specialize in the good they have comparative advantage in
• Specialization


  • Leads to more efficiency
  • Leads to higher production
  • Expands the economy
  • Reduces production costs
• Globalization


  The growing economic integration of the world through migration, trade, investment, and technology
• Positive Impacts of Globalization on Developing Economies

  • Increased access to larger markets
  • Inflow of foreign investment
  • Technology transfer and skill development
• Negative Impacts of Globalization on Developing Economies

  • Economic dependency
  • Vulnerability to market fluctuations
  • Potential for exploitation and inequality
• Insights from Stiglitz's "Globalization and Its Discontents"

  • Globalization can cause economic discontent in developing nations
  • International institutions' policies can fail to consider local contexts
  • Need for reform to ensure globalization's benefits are shared more fairly
• Policies to maximize the benefits and minimize the drawbacks of globalization should be adopted by developing nations, including investments in infrastructure, education, and responsible governance
• International organizations like the World Bank, IMF, and WTO must implement more inclusive and adaptable policies that consider the specific needs of each nation
• Interdependence


  Shared needs of countries for knowledge, resources, and other essentials supplied by other countries
• Public Choice Theory


  Applies economic principles and methods to the study of political behavior, analyzing how public decisions and policies are made
• The seminal work "The Calculus of Consent" by James M. Buchanan and Gordon Tullock was published, contributing to the development of Public Choice Theory


  1962
• Public Choice Theory


  • Rational choice
  • Self-interest
  • Collective decision-making
  • Government failures