The lack of a satisfactory definition of comparative advantage

Abstract

Comparative advantage is often defined by relative autarky pricesto span the Ricardian and Heckscher-Onlin-Samuelson models.During the 1960s-1970s the impossibility of having a universaldefinition of CA was established and model-specific definitionswere searched for. More recent contributions have shown thattradable capital goods pose insurmountable obstacles even forconstructing model-specific definitions. Another strand of the literaturerestated autarky prices as the definition of CA but contentedwith an explanation of trade with barely any empiricalcontent that is valid only under very special assumptions. A moreprecise and comprehensive definition of comparative advantageis therefore missing.