Making Sense of the Comparative Advantage Gains from Trade: Comment on Batra
This paper addresses Ravi Batra's (2002 ) criticism of the basic comparative advantage gains-from-trade model. While Batra's criticism is based on the selection view interpretation of real income, the gains from trade can only be properly understood from the options view interpretation of real income. I also show how a recent empirical implementation of the gains-from-trade model defies Batra's claim that "the consumption gain . . . is not subject to measurement" (2002, p. 642). Copyright © 2006 The Author; Journal compilation © 2006 Blackwell Publishing Ltd.