Paul Samuelson argued that contrary to the standard interpretation,in certain circumstances,the theory of comparative advantage predicts that a rich country might actually be worse off by switching to a free trade regime with a poor country.

Question

Quizplus · Accepted Answer

Once all the assumptions are dropped,the case for unrestricted free trade,while still positive,has been argued by some economists associated with the "new trade theory" to lose some of its strength.Nobel Prize winning economist Paul Samuelson argued that in certain circumstances,the theory of comparative advantage predicts that a rich country might be worse off by switching to a free trade regime with a poor nation.

Paul Samuelson Argued That Contrary to the Standard Interpretation,in Certain