Question

Please provide thorough answer. Thanks!

Mercantilists are a group of economists with views of trade that are inconsistent with the views of classical economists, What are these views and how did they expect these to be accomplished. What are the problems associated with their policy prescriptions?

Answer 1

answer

Mercantilist viewed that the country will be prosperous only in the case when the exports in the nation are much more than the imports. They meant that the nation should export as much as goods possible for the firm to export and save the local industry and increasing high tariff and barriers for the import.

They planned to achieve this by promoting more an more exports from the nation and restricting all the imports possible.

The problem with this policy is that the export of a country is the import of other countries. If all the nations started following Mercantilism and stopped importing there will be no exports in the trade market and all the countries will never benefit from any trade.