Comparative Advantage: This economic theory suggests that countries should specialize in producing goods for which they have a lower opportunity cost relative to other countries. This leads to more efficient production and trade.
Complementary Advantages: This concept focuses on the idea that countries can benefit from trading together if they produce goods that complement each other, filling gaps in one another's product offerings.
Core, Semi-Periphery, and Periphery: Wallerstein's theory divides the world into three economic strata:
Core countries: Wealthy, developed nations that dominate global trade and have high levels of industrialization and economic power.
Semi-periphery countries: Nations that are in transition between core and periphery, often involved in both manufacturing and exporting raw materials.
Periphery countries: Less developed nations that typically provide raw materials and labor but gain less benefit from global trade.
Global Capitalism: The theory posits that the capitalist world economy is a system of exploitation where core nations benefit disproportionately from the resources and labor of peripheral countries.
Stages of Economic Growth: Rostow proposed five stages through which countries progress in their development:
Traditional Society: Characterized by subsistence agriculture and a lack of infrastructure.
Preconditions for Take-off: Economic and social conditions begin to change, leading to the start of industrialization.
Take-off: Rapid economic growth occurs, fueled by industrialization and investment.
Drive to Maturity: The economy diversifies, technology continues to improve, and standards of living rise.
Age of High Mass Consumption: A shift towards consumption and services as the economy becomes highly developed.