By John Tamny Real Clear Politics
"Much of the secret of United States wealth lies in the fact that the inhabitants and firms of each state in the Union have been able to specialize along the lines of comparative advantage, without interstate barriers." Robert Mundell, Man and Economics
Where trade is concerned, the long-held presumption by classical economic thinkers has been that international trade is merely an extension of domestic trade given a single currency definition that erases exchange-rate risk. As Stanford Professor Ronald McKinnon observed in The Rules of the Game, when countries maintain a uniform fixed exchange rate, "each national economy gains from more efficient specialization in international goods markets" and "also gains from better monetary stability than it could manage on its own."