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Q. The Specific Factors model clearly illustrates how the expansion of trade can have significant distributional effects on the relative incomes of different factors of production. Why do economists object to using trade protectionist policy to mitigate or reverse these effects? If mitigating such effects were considered to be a reasonable goal, would economists then favor do this via the use of trade policy? Why or why not?
Answer: Economists note that generally such remedies are incompetent. Namely, there is nearly always an alternative policy that can provide the same sectoral protection with a lower cost to the rest of the economy. Anyhow such policy would as well be inefficient in that they would divert scarce resources away from the country's area of comparative advantage.
what are the alternative theories of trade?
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