Microeconomics

Date: Oct 11, 2017
Category: Economics

Economics has many aspects that, sometimes, are not seen in a brief view on them. Microeconomic theoreticians sometimes ignore economic realities. This paper will evaluate Ian Fletcher's critique of the assumptions of the standard microeconomic model of free trade. Also, it will consider the author's assumptions, evidence, theory, and method of argumentation. Moreover, about the paper will consider the real-world political and economic context for this issue as well as the full set of policy alternatives that nations actually have available to them.

First of all, it is needed to say that Ian Fretcher in his article "The Theory That's Killing America's Economy" tells his point of view regarding microeconomics and free trade. He critiques an idea of such a model stating that some analytics do not see a full picture of this issue. Giving examples of dubious assumptions, Fretcher tells why they are wrong regarding real-world economics. He clearly states that the sustainable trade could not be reached as it is not balanced because of many factors. We agree with this statement, because every country has its own limit of resources.

The second issue concerns externalities and prices of national products that may be higher or lower than a profitable unit. Fretcher mentions environmental damage due to the overconsumption of separate goods. We can state that regarding one or another region the problem may differ, but non-balanced trade can lead to bad results.

Speaking about productive resources, the author says that there is no positive thing in this kind of trade. Industries will kill each another as materials would be available in many regions and there would be no reason for the trade on another stage. Nevertheless, free trade of national resources can be efficient if every case would be researched and limited in export and import.

To sum up, Fretcher's theory is quite clear and right. At the same time, analytics is true in some sense regarding perfect case of microeconomics.