How the country built the fastest-growing economy among developing nations
The continent of Africa has yielded little economic growth in the past half-century. Of the 54 countries within the continent, only have a handful have avoided economic stagnation. …
Explaining the two-factor model
The Heckscher-Ohlin model was developed by the Swedish economists Eli Heckscher and Bertil Ohlin to study how comparative advantage is influenced by the relative abundance of factors within a country. …
Explaining a trade model based on country location and size
The gravity model, initially made popular by the cartographer E.G. Ravenstein in 1889, was originated to study the impact of country size and location on migration patterns.
In 1954, economists Walter Isard and Merton Peck expanded the gravity model to examine the impact of country size and location on international…
Explaining one of the oldest models of comparative advantage
In recent articles, I discussed both the benefits of trade and the concept of comparative advantage. As we know, a country has a comparative advantage in producing a good if the opportunity cost of producing that good is lower in that specific country than it is in other countries. …
Economics can be a difficult subject to learn, so it’s no surprise that many students are intimidated by economics classes in high school and college. But at it’s core, economics is the study of how humans interact with value. …
Explaining the distinction between both terms
Economists often focus on the externalities that occur between individuals. Externalities can be thought of as a cost or benefit that is imposed on a party without the party agreeing to incur that cost or benefit.
Two common externalities that we see in the real world are trespasses and nuisances…
Explaining the theory of comparative advantage
Why do we trade?
You might not always think about it this way, but you’re trading all the time. You trade with the owner of the gas station by exchanging money for the fuel you put into your car. You trade with the grocer when you buy food each week…
Explaining when and why your rights may be limited
I recently explained the importance of private property rights, describing how rights can lead to an increase in investment and economic growth. But now let’s take a look at another question: are property rights absolute?
In other words, can your property rights ever be limited?
The simple answer is that…
Explaining why it’s essential to economic growth
Why do we need private property laws? Couldn’t we all just share property together?
No, not really. As Daniel Cole and Peter Grossman write in “Principles of Law and Economics,” productive capital is the result of both “economically valuable assets and the sociolegal fact of functional and secure property systems…
A lesson in successful marketing and restoring consumer trust
Since its inception in 1993, Chipotle has grown to become one of the most popular fast-casual restaurants, successfully balancing the convenience of fast food with the quality of a casual, sit-down restaurant. Chipotle’s growth hasn’t been easy, though — over three years between 2015 and 2018, the company faced reports…
