What is Ricardian model?
The '''Ricardian model''' is a [[model]] used in [[economics]], named after [[David Ricardo]]. It is an easy way to explain [[trade]] between two countries, and the resulting [[Gains from trade|gains]]. The model only uses [[workforce productivity]] to explain differences in international trade. [[Comparative advantage]]s result from the difference of a single economic factor, that is [[labor]]. Workforces in different countries have different levels of productivity, and the resulting [[opportunity cost]]s are different. In this regard, Ricardo used the ideas of [[Adam Smith]] regarding [[Absolute advantage]], and developed them further. The model is described in Ricardo's main work, [[On the Principles of Political Economy and Taxation]], published in 1817. {{stub}} [[Category:Economics models]]