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Mercantilism vs Free Trade

Mercantilism vs Free Trade. Mercantilism. Definition of military power 1500-Adam Smith Adam Smith-WWII WWII-today Trade policy Export more than you import difference made up in gold. Mercantile Trade policy. Restrictions on trade Colonies only trade with mother country

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Mercantilism vs Free Trade

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  1. Mercantilism vs Free Trade

  2. Mercantilism • Definition of military power • 1500-Adam Smith • Adam Smith-WWII • WWII-today Trade policy Export more than you import difference made up in gold

  3. Mercantile Trade policy • Restrictions on trade • Colonies only trade with mother country • Trade carried in ships of mother country • And so on Contributed to US revolution

  4. Free Trade • Ricardo: Absolute and Comparative Advantage • Individual interests versus group interest in free trade

  5. Neomercantilism • Alexander Hamilton • The infant industry argument • US • Latin America - import substitution • Asia - export promotion • World oscillates between free trade and neomercantilism -- FT gradually increases

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