Summary Of Free Trade Under Fire By Douglas Irwin

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The concept of free trade has been debated throughout the ages and continues to stir emotion, as the title of Douglas Irwin’s book: Free Trade Under Fire. Douglas A. Irwin (born in 1962) is not only a businessman, but also is an American economist. But compared to other economists, he is exception stood out with clear and jargon-free English writing style. And in this book, Irwin has provided an informative, comprehensive and easy-to-read explanation of the benefits of a liberal international trading, help people who are deceived of the accusations against open markets have more information and knowledge to evaluate the issue more precise.
In the introduction, Irwin point out the truth that the reasons of untrue thought about free trade is …show more content…

Trade is now more important than in the recent past and as a result, world trade has expanded rapidly in recent years. Irwin also points out the flaws in measures of openness when traded alone and given the fact that intermediated goods often cross borders several times during the production process. Nowadays, thanks to the reduction of legal trade restrictions, commercial integration become greater than before. And for greater integration, Irwin suggests some reasons such as income growth in the OECD countries and worldwide reductions in tariffs and transportation costs.
Moving to chapter 2 – the longest chapter of the book, Irwin demonstrates the significant differences between absolute advantage and comparative advantage. Starting with classic theories of Adam Smith and David Ricardo described the gains from trade in a systematic way, Irwin points out to the readers about the three main advantages of trade. The first and also the main advantage is improved resource allocation trade could lead to higher income. It means that when countries know and understand their competitive advantage, they could be able to allocate the resources in a reasonable manner in order to earn more profit. But trade not only helps to allocate existing resources properly but also makes those resources more productive, that’s the second advantage. By shifting resources capital and labor into sectors in which domestic industries are

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