Icelandic Alþing Elections (with update) | 79 comments (79 topical, editorial, 0 hidden)

Re: What says Wikipedia on comparative advantage? (none / 1)

Well, you clearly need a drink, but can you explain what you mean by:

I'm still no closer to a model of division of labour with unemployment.

(Thankyou for this thread BTW, you managed to express very well what I was too incoherent to be able to explain/persuade anyone of in the modeling thread all those months ago.)

by Metatone (metatone [a|t] gmail (dot) com) on Mon May 14th, 2007 at 03:26:40 PM EST
[ Parent ]

Re: What says Wikipedia on comparative advantage? (none / 1)

It is very easy to make a (mathematically) neat model of division of labour, which generalises to a model of comparative advantage, if you assume full employment. But a model that incorporates unemployment is a harder nut to crack.

Bush is a symptom, not the disease.

by Carrie (migeru at eurotrib dot com) on Mon May 14th, 2007 at 05:51:28 PM EST
[ Parent ]

Re: What says Wikipedia on comparative advantage? (none / 1)

Don't they usually just assume unemployment as a sort of "reserve function" like the setup for gas dynamics in the presence of a liquid?

Molecules (people) are absorbed and released by the reservoir according to the pressure in the chamber and the size of the reservoir (amount of economic activity and number of unemployed) along with an assumed NAIRU?

by Metatone (metatone [a|t] gmail (dot) com) on Tue May 15th, 2007 at 03:33:40 AM EST
[ Parent ]

Re: What says Wikipedia on comparative advantage? (none / 1)

I see I am not going to be able to avoid lots of variables and equations.

Bush is a symptom, not the disease.

by Carrie (migeru at eurotrib dot com) on Tue May 15th, 2007 at 03:39:20 AM EST
[ Parent ]

Re: What says Wikipedia on comparative advantage? (none / 1)

I think it is unavoidable, because if you are using division of labour to generalize towards comparative advantage, then you are basically describing interactions between (at least two [wool? wine?] different "employments." In that case at minimum, unemployment is another (third) "employment" kind that needs another variable to represent it.

by Metatone (metatone [a|t] gmail (dot) com) on Tue May 15th, 2007 at 05:50:37 AM EST
[ Parent ]

Re: What says Wikipedia on comparative advantage? (none / 1)

Going from 2 to 3 employments actually complicates matters a lot, mathematically.

Bush is a symptom, not the disease.

by Carrie (migeru at eurotrib dot com) on Tue May 15th, 2007 at 06:09:05 AM EST
[ Parent ]

Re: What says Wikipedia on comparative advantage? (none / 1)

Right, but I can't see a way to avoid it and retain any meaningful statements about comparative advantage. If we include only "unemployment" and "employment" as just the 2 kinds, I think we lose the ability to say meaningful things about "advantage."

by Metatone (metatone [a|t] gmail (dot) com) on Tue May 15th, 2007 at 06:20:31 AM EST
[ Parent ]

Icelandic Alþing Elections (with update) | 79 comments (79 topical, 0 editorial, 0 hidden)

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