What are the different types of international models?

International trade models can be traced at least to the theory of the absolute benefits presented by Adam Smith. This theory has shown that it was advantageous for the country to specialize and participate in international trade if it could produce some goods more efficiently than its business partners. This theory was further developed by David Ricard's comparative advantage of theories, showing that the country should specialize in those goods in which it was quite effective in production. Ricardo's theory was further improved in recent times to create an unorigard theory that uses less prerequisites than the original theory. Other important models of international trade include Heckscher-Ohlin theory, which emphasizes the importance of production factors in the country, and the theory of gravity that focuses on the size and proximity of business partners.

, while only showed that international trade was beneficial in certain specific circumstances, r r, r, r, r, r, r, r.deorie icardo showed that it is always meaning to makeShe specialized in the production of these goods and services in which it is quite effective. This specialization increases productivity and increases the overall performance of the country. The country does not have to have an absolute advantage in the production of goods, provided that the cost of production of goods is lower than its business partners in the production of the same goods.

Ricard's theory of comparative advantages takes advantage of numerous prerequisites. For example, it assumes that the only entry into industrial production is work and that this work is mobile between industries, but not among countries. Modern improvements to Ricardian theory have created models of international trade that can demonstrate a comparative advantage in a variety of goods and countries than Ricardo's original model, which used two countries and two categories.

The

model of the International Heckscher-Ohlin Trade emphasizes resources available in each country and emphasizes the importance of production factors in each country. MThe foot of factors, such as work or capital in the country, determines the type of international trade in which the country deals with. The country produces and exports goods that use abundant production factors and will import those goods that require production factors that are rare in the country.

International international models also include a gravitational model that focuses on the economic mass of each country and the distance between business partners. The gravity model comes to the prediction of trading flows between countries on the basis of these elements and other factors, such as colonial history between countries that have influenced business patterns. This model has some support from empirical observations of transactions in Blocsjako trading the North American Association of Free Trade.