However, "optimal" arrangements that ensure that maximum trade flows occur between nations are not always implemented.
The law of comparative advantage states that nations will benefit from trading with each other because each will have a comparative advantage in the production of some goods. However, "optimal" arrangements that ensure that maximum trade flows occur between nations are not always implemented. In this paper, we look at one of the developments responsible for reducing trade flows. Until the early 20th century, trading nations started by harmonizing their weights and measures, and ...