A country gains Comparative Advantage in producing a particular good or service by producing it at a lower cost than other countries. A country will then proceed to specialize in producing those goods and services that it has a comparative advantage in. Specialization has its advantages and its disadvantages. Recently, many countries are shifting from old industries in which they have lost comparative advantage to new ones. When a country changes from one industry to another the obvious disadvantages are:
- Idle Resources such as machinery, human skill that cannot be used in the other industry
Before a shift can be made from one industry to another , countries have to put facilities in place to deal with the negative aspects of the change.
Jamaica is a case in point. Jamaica used to specialize in agricultural produce such as sugar cane, banana etc. As a result, there are many small farmers in Jamaica. However, due to lack of technology, investment and other factors Jamaica has lost its comparative advantage in farming and is now shifting to other goods and services. This has left many small farmers without a market for their produce.
Countries have to realize that specialization and a Global market require the best in technology, knowledge and expertise to gain that comparative advantage.
Author: Shauna Lowe
The study of Economics is struggling to keep its relevance in today’s world while discussions continue on how to keep the field relevant . This is because today’s economists appear to lack the skills to accurately forecasts economic events accurately. How is it Economists cannot predict an economic crash? Everyone asks. People seem to think that Economists do not know what they are talking about. Despite the many challenges with this field, Economics is relevant for the following reasons:
- Economics provide a valuable framework for individuals, societies and firms to make good decisions. Almost every problem can be analyzed from an Economic angle.
- Economics provide a scientific approach to face the changes and challenges of life. Change takes place daily and Economics provides principles and methods to approach them.
- Another important reason Economics is relevant is that it analyzes common problems such as unemployment and inflation. So although there are challenges with the field, it is relevant because of the kind of issues it addresses.
So it seems that it is in our best interest to work on or hope for advancement in the field instead of labeling it unnecessary.
Author: Shauna Lowe
Aim of this Site: To encourage sound decision making through the use of economic study and applications.
The aim of this site is to encourage sound decision making among individuals through the application of economic principles. This site will discuss economic principles, models, issues and their daily use in decision making.
Jamaica needs more individuals with the mind of an economist. This is because a study of economics improves an individual’s decision making and analytical skills. In a nutshell, Economics is the study of how individuals and firms use their scarce or limited resources to accomplish their goals. The individuals’s goal is satisfaction (or utility) and the firm’s goal is to make a profit. In other words, Economics examines how individuals and firms make trade-offs. On an individual level, we have to make many trade-offs daily. However, many individuals do not possess adequate knowledge or skills to make decisions that will be beneficial to themselves and those around them.
THE PLACE TO START…
Based on this observation I am making the following suggestions:
- Economic study should be introduced at the secondary level in schools This is the time students start making important decisions relating to career or field of study, higher education vs work, sex vs abstinence, and also relationship choices. These are all important decisions that should not be taken lightly. Many students don’t have all the necessary information or family support to make wise choices in these areas. It would be good to equip students with a framework for making such decisions. The basic principles in Economics will help students to carefully weigh the opportunities available to them so that they can choose the best alternatives at all times.
- University Students should be encouraged to take at least one Economics course Each individual make choices daily that require making trade-offs. A basic knowledge of economics improves decision making skills, increases awareness of local and international economic issues and helps individuals to make informed votes.
- The average Jamaican should read to acquire an understanding of economic issues. I encourage each Jamaican to read to acquire a basic knowledge of “The economical way of thinking”. It is one way to move the country forward.
Your ideas and comments on this article are welcomed. You can also suggest topics that relate to Economics for discussion.
Author: Shauna Lowe