International Economics

5 Key excerpts on "International Economics"

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  eBook - ePub

  Applied International Economics

  • W. Charles Sawyer, Richard L. Sprinkle(Authors)
  • 2020(Publication Date)
  • Routledge

    (Publisher)

  However, over the last several decades, this interdependence truly has become a two-way street. In the U.S. and the rest of the world, goods, services, capital, technology, and people flow across borders with greater frequency and in increasingly greater volumes. Between 1975 and 2019, global trade in goods has increased by almost 600 percent. For some individuals and businesses, international transactions and international relationships have become more important than interactions within their own country. National policies that affect trade, investment, the value of the country’s currency, and the level of national output can be used to enhance these benefits and lessen the costs of interdependence. To reap these additional benefits, each country needs to base its national policies on an objective analysis of International Economics.

  The purpose of International Economics is to explain these patterns of international trade, investment, and other cross-border transactions that we currently observe in the real world. Much of our examination of International Economics is based on analyzing the economic data of individual countries and the world economy. In this chapter, we describe several different aspects of a country’s interdependence in the world economy. Throughout the rest of the text, we will refer to economic data as it pertains to selected international economic issues. We begin by describing how International Economics relates to the concepts you have learned in previous economics courses. From there we will examine the overall landscape of the world economy. We will do this by first looking at the output of the world economy. With this information we can then consider how international transactions such as international trade and capital movements fit into the picture. At that point, some of the more important issues that are discussed later in the book can be introduced.

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  eBook - ePub

  Global Covenant

  The Social Democratic Alternative to the Washington Consensus

  • David Held(Author)
  • 2013(Publication Date)
  • Polity

    (Publisher)

  Part I

  ECONOMICS

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  1

  Economic Globalization

  The nature and extent of global economic integration is subject to intense dispute (Held and McGrew, 2003, part 4). At issue is whether it is accurate to talk of the emergence of a single borderless global economy; how far such an economy is driven by the new processes of the electronic, information order; and the degree to which the new global economy places constraints on progressive economic and social policy. For some, the new geography of the world economy heralds the emergence of a ‘single, planetary scale worldwide economy’ (see Dicken, 1998). Led by the growing interlinking of global and local production systems, the new economic order is increasingly integrated across space, real and virtual. Multinationals and global production networks, working on products as diverse as cars, computers and clothes, are reshaping economic activity. The result is a novel form of economic globalization, mediated by the global infrastructures of information and communication, functioning as a unit in real or chosen time (Castells, 2000). Regional differences still matter, and many are marginalized and excluded. But, according to the theorists of the global economy, the current world economic order operates with a different form and logic from those found in earlier centuries.

  This view is challenged by those who argue that economic globalization is far more limited than is often realized (Hirst and Thompson, 1999; Gilpin, 2001). While they accept that the links between national economies have become more marked, they find that the ‘new global economy’ is less integrated and inclusive than in the late nineteenth century. Distance and national borders are still ‘powerful barriers to economic interaction’ (CEPR, 2002). In addition, governments are not as constrained by the open world economy as is often claimed. Macroeconomic policy, along with the social policies underpinning the welfare state, remains the preserve of government. Global markets have not triumphed over states.

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  eBook - ePub

  Global Political Economy

  Understanding the International Economic Order

  • Robert Gilpin(Author)
  • 2011(Publication Date)
  • Princeton University Press

    (Publisher)

  CHAPTER FOUR

  The Study of International Political Economy

  THE STUDY of international political economy (IPE) is of necessity highly dependent on the theories and insights of neoclassical economics. However, IPE and neoclassical economics ask different questions as they apply their own mode of analysis.1 Whereas economics is primarily concerned with efficiency and the mutual benefits of economic exchange, international political economy is interested not only in those subjects but also in a broader range of issues. IPE is particularly interested in the distribution of gains from market activities; neoclassical economics is not. Although, at least over the long term, every society gains absolutely from the efficient functioning of international markets, the gains are seldom distributed equally among all economic actors, and states generally are very much concerned over their own relative gains. Whereas economists regard markets as self-regulating mechanisms isolated from political affairs, specialists in IPE are interested in the fact that the world economy has a considerable impact on the power, values, and political autonomy of national societies. States have a strong incentive to take actions that safeguard their own values and interests, especially their power and freedom of action, and they also attempt to manipulate market forces to increase their power and influence over rival states or to favor friendly states.2

  Whereas economists and economic analysts are generally indifferent to the role of institutions in economic affairs (due to their focus on the market), the nature of the international institutions and those international regimes that govern international markets and economic activities constitute a central concern of international political economists. As regimes may significantly affect the distribution of gains from economic activities and the economic/political autonomy of individual states, states—especially powerful states—attempt to influence the design and functioning of institutions in order to advance their own political, economic, and other interests. Thus, the study of international political economy presumes that states, multinational corporations, and other powerful actors attempt to use their power to influence the nature of international regimes.3

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  eBook - ePub

  Understanding Economics

  • Harlan M. Smith(Author)
  • 2016(Publication Date)
  • Routledge

    (Publisher)

  The International Economy      

  32 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.

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  United States Trade Relations with the Newly Industrializing Countries in the Pacific Basin

  • Won Kwang Paik(Author)
  • 2018(Publication Date)
  • Routledge

    (Publisher)

  I

  The Study of International Trade Relations

  INTRODUCTION

  For many years, international trade has been an essential part of international relations. Traditionally, economists rather than political scientists have paid the most attention to international trade and national policies. Recently, however, with the emergence of “new Protectionism” and the resurrection of international political economy as a legitimate field of international relations, international trade and trade relations have become the focal points of political science inquiries. Given its varied intellectual attractions, the central theme of international trade remains constant: What are the causes of trade relations? Specifically, what factors determine a flow of commodities from country A to country B ?

  There are basically three major types of answers to this question. The first type is a neoclassical economic explanation which originates in the writings of Adam Smith and David Ricardo. In this explanation, the amounts and types of commodities that are traded are not determined by any single individual or enterprise. Rather, exchanges are determined by the advantages and disadvantages which are naturally endowed to a particular producer. If a particular person, business firm, or country has a naturally endowed advantage in producing a particular commodity, then that commodity will be exported to another place with a less amount of the endowed factor.

  The second type of explanation stems loosely from the writing of Karl Marx. Exchanges of commodities are not naturally determined. Rather, they are structurally distorted. Because of the dialectical nature of the international system, trade relations are bound by a nation’s status in the system as either an undeveloped or a developed economy. For an undeveloped nation, the nature and types of trade relations will be conditioned and defined by a developing trading partner. In short, trade decisions are made by developed nations and are determined by the conditions surrounding the international capitalist system.

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