Shaikh’s path 2 Absolute Advantage

The speaker discusses their controversial work on trade, focusing on the methodological approach of questioning established ideas. Using stage magic as an analogy, they explore the concepts of comparative and absolute advantage, highlighting the flaws in Ricardo's theory when considering endogenous money. The speaker concludes with empirical evidence supporting the idea of absolute advantage over comparative advantage.

What is the speaker's primary methodological approach to research?

• Following traditional methods

• Questioning foundational assumptions

• Building on existing theories

• Relying on empirical data only

How does the speaker relate stage magic to their research approach?

• By emphasizing the importance of illusions

• By highlighting the need to understand appearances

• By comparing magic to scientific experiments

• By showing how magic tricks can solve problems

What is the key difference between Smith's and Ricardo's trade theories?

• Smith focuses on comparative advantage, while Ricardo focuses on absolute advantage

• Smith emphasizes absolute advantage, while Ricardo introduces comparative advantage

• Both focus on the same principles of trade

• Ricardo's theory is based on empirical data, while Smith's is not

What role does the quantity theory of money play in Ricardo's explanation?

• It is a modern addition to trade theories

• It is central to Smith's theory

• It is a mechanism proposed by Ricardo

• It is rejected by both Smith and Ricardo

What conclusion does the speaker reach after their research on trade theories?

• Comparative advantage is more consistent with data

• Neither theory is supported by empirical evidence

• Absolute advantage is more consistent with data

• Both theories are equally valid