Economics
Basics of International Economics
The basics of international economics encompass the study of how countries interact through trade, finance, and investment. Key concepts include comparative advantage, exchange rates, balance of payments, and trade policies. International economics seeks to understand the impact of globalization on national economies and the implications for economic growth, income distribution, and overall welfare.
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3 Key excerpts on "Basics of International Economics"
eBook - ePub- Harlan M. Smith(Author)
- 2016(Publication Date)
- Routledge(Publisher)
The International Economy32 International Economic Relations
Recently there has been more attention to the importance of international economic relations. To study them, students need background in both micro and macro; but when the topic is put at the end of the book, instructors may fail to get that far in the course. There is a problem in any case if the books don’t provide enough tie to the real international relations issues that are not just a matter of the theory of comparative advantage. One may get a discussion of protectionism as against free trade principles, but one may get little if any indication of the respects in which the cold war distorted international trade and investment, little if anything on the background of and nature of the third world demands for a New International Economic Order, little if anything on the conflict over the Common Agricultural Policy of the European Economic Community, little on the complex factors in the U.S. quarrel with Japan, and little on the complex sets of factors leading to the breakdown first of the gold standard and then of the Bretton Woods System. Having any real understanding of international economic relations is simply not reducible merely to understanding the principle of comparative advantage and the present nonsystem in international exchange rate determination.As for comparative advantage, despite efforts to distinguish it from absolute advantage, students typically do not learn why trade would pay even if a country was in some sense more efficient in every line of production than competitors, or how a country could still trade profitably even if it was less efficient in every line than any foreign country. The clue, of course, is that the degree of a country’s superiority or inferiority in different lines would not be, indeed could not be, exactly the same; hence it would pay to specialize in producing and exporting those things in which its advantage was greatest or its disadvantage least.
eBook - ePubInternational Trade
New Patterns of Trade, Production and Investment
- Nigel Grimwade(Author)
- 2020(Publication Date)
- Routledge(Publisher)
Chapter 2 Basic Theories of International Trade CHAPTER OUTLINES: Introduction. Classical Theories of Trade - absolute advantage, comparative advantage, the empirical evidence. The Terms of Trade. The Factor Proportions, Heckscher-Ohlin Theory of Trade - the Leontieff Paradox, other empirical evidence. Increasing Opportunity Costs. Indifference Curves. General Equilibrium. The Factor Price Equalisation Theorem. Demand-Side Theories of Trade. Economies of Scale. Technology-Based Theories of Trade - technology-gap trade, the product life-cycle model of trade. The Case of Monopoly. Conclusion. Introduction Why do countries engage in trade? What benefits does trade bring to countries? What products will a country export and what will it import? What determines the pattern of its trade? And, since trade is the result of specialisation, what determines the products in which a country specialises? Moreover, how does a country's pattern of specialisation and trade change over time? These are some of the questions which have pre-occupied trade theorists for over two centuries. In this chapter, we shall identify some of the theories which economists have developed (and the various theoretical tools which they have used in the process) in an attempt to answer these questions. This chapter is primarily concerned with the basic or more conventional theories which set out the gains which countries can expect from specialising in those activities in which they are relatively efficient. These constitute necessary 'building blocks' for understanding the more esoteric models which have been developed in recent years, which take into account some of the complexities of trade in today's world. These newer trade theories are not considered until Chapter 3. Usually, the term 'conventional' is restricted to the theory of trade expounded by the Classical and Neo-Classical schools of economic thought
eBook - ePubEconomic Analysis and Law
The Economics of the Courtroom
- Christopher E.S. Warburton(Author)
- 2020(Publication Date)
- Routledge(Publisher)
As far as the trade rules are concerned, the GATT/WTO has made a valuable contribution over the years to greater stability, certainty and fairness in trade. But the rules are not perfect and there is always room for improvement. This is one reason why governments continue to negotiate and to seek out further mutually advantageous accommodation. Like trade liberalization, crafting better rules remains a work in progress.(WTR, 2007, p. iv)8.2 Trade theories as foundations of international trade lawInternational economic laws are intricately related to the liberal exchange of goods and assets across international boundaries. That is, goods and financial assets are expected to be exchanged across international boundaries without undue or unfair restrictions that will imperil the welfare of business and consumers. Consequently, international economic laws must be evaluated against welfare effects and economic theories that articulate collective improvements on the welfare of nations. The bases and effects of international trade are probably the most important foundational concepts to understand the spirit and intent of international economic laws.The initial impulses suggested that international trade must be done to the peril of other nations. Essentially, the early proponents of international exchange believed that trade was a zero-sum game. Pointedly, nations can only gain at the expense of others, meaning that nations must impose restrictions on international exchange that will only be beneficial to their self-interests. The problem is that no nation will benefit if each and every nation behaves as such.The mercantilists were the first to experiment with the idea of restrictive exchange in order to amass national wealth for proprietary access to international markets and international dominance. The primitive trade theory, which was well received and propagated for many reasons, became fashionable in an era of aggression to acquire bullion (commodity money) and power.17
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