Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
I'm with you on the sustainability and lack thereof.

But isn't the inevitable effect of comparative advantage that someone goes to the wall in the medium term (albeit everyone will ultimately be better off when used as directed)?

IANAE, but it just seemed to me from the way Jerome described it that the "Dutch disease" triggered the same mechanisms one would expect to see when transitioning to a comparative advantage scenario.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt št gmail dotcom) on Mon Jun 18th, 2007 at 05:58:51 PM EST
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As I understand it, we're never supposed to pick comparative advantages that are as potentially unsustainable as some of the financial instruments Mig has referred us to... it's not something the theory seems to consider, but then, IANAE either...
by Metatone (metatone [a|t] gmail (dot) com) on Tue Jun 19th, 2007 at 12:57:39 AM EST
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Since, as not-economists (ie dummies), the kind of analogies we are offered by way of explanation of comparative advantage generally concern Bob and Alice who grow tomatoes and lettuces, or some such agricultural object lesson, it's interesting to note that the theory never takes into account that it might be a more sustainable practise to rotate the cultures of tomatoes and lettuces rather than specialise.

This takes on real-world proportions when applied to rain-forest clearance for monocultures. Yet we're still being told, in the name of comparative advantage, that the Doha Round is the way to go.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Jun 19th, 2007 at 09:34:02 AM EST
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My own ricardo gardening version has specialisation risk mentionned and then discussed in the comments :)


by Laurent GUERBY on Tue Jun 19th, 2007 at 03:39:16 PM EST
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