Publication Type

Journal Article

Version

acceptedVersion

Publication Date

1-2019

Abstract

This paper outlines a classroom trading game that explores equilibrium terms of trade using the principle of comparative advantage and theory of reciprocal demand. Students are divided into eight groups. Each group is assigned a country with hypothetical productivity and each country seeks its trading partner based on comparative advantage. Students simulate the trading of goods between countries with the objective of achieving the best possible terms of trade. The game encourages students to reflect on their learning of the principle of comparative advantage, consider improvements in trade terms through negotiation, and summarize the conditions for mutually beneficial terms of trade. The study contributes to the existing literature by extending the discussion beyond comparative advantage to incorporate mutually beneficial terms of trade as well as factors contributing to the distribution of trade gains.

Keywords

Active learning, Classroom experiment, International trade, Comparative advantage, Terms of trade

Discipline

Higher Education | International Economics

Research Areas

International Economics

Publication

International Review of Economics Education

Volume

30

First Page

1

Last Page

7

ISSN

1477-3880

Identifier

10.1016/j.iree.2018.10.002

Publisher

Elsevier

Copyright Owner and License

Authors

Additional URL

https://doi.org/10.1016/j.iree.2018.10.002

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