Sources of Comparative Advantage
What generates comparative advantage? We look briefly at geography, factor proportions, increasing returns to scale and institutions such as labor market flexibility.
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A couple of requests:
-For the resources and links that you provide at the end of the lectures, please add them to this page outside of the video screen.
-Although I have my browser set so that links I've already visited show as a different color, that doesn't work with your videos. If you could fix that I would appreciate it.
Neither of these are big issues, and I understand that you you're both busy, so if they never get done it's not a big deal (the MRU idea is huge, these minor issues are not).
Actually Toyota started as a producer of automated looms: http://en.m.wikipedia.org/wiki/Toyota#section_2
However I don't think that Japan has a comparative advantage anymore, except that the capital invested is so huge they don't want to move out of Japan. But there is a reason that new automobile assembly plants are not build in western Europe or Japan.
Mr. Tabarrok, you mention division of knowledge as an improvement, but doesn't the age of non - fundamental inventions show us that maybe the generalist is missing, because communication and inspiration from other industries is missing.
The same advantage they had in textiles before they moved into mechanics, as far as I know: lots of cheap hardworking conscientious precise labor, and plenty of engineers.