Mill's paradox

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The term was coined by Edgeworth (1899).[1] In John Stuart Mill's words, "The richest countries, caeteris paribus, gain the least by a given amount of foreign commerce: since, having a greater demand for commodities generally, they are likely to have a greater demand for foreign commodities, and thus modify the terms of interchange to their own disadvantage".[2]

John Somerset Chipman argues that the Mill's paradox is not a paradox at all; rather, it is another name for the Law of Demand.[3]

Argentine economist José Luis Espert uses Mill's paradox to explain why openness to free market among two countries, tend to favor the smallest country.[4]


References