Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
International Trade Theory Chapter 1: Introduction Hyun-Hoon Lee OUTLINE 1.1 Importance of International Economics 1.2 International Trade and the Nation’s Standard of Living 1.3 The Major U.S. Trade Partners: The Gravity Model 1.4 The Subject Matter of International Economics 1.5 Purpose of International Economic Theories and Policies 1.6 Current International Economic Problems 1.7 The Globalization Challenge 1.8 Organization and Methodology of the Text slide 1 1.1 Importance of International Economics International trade is crucial to the well-being of nations Some knowledge of international economics is necessary to understand what goes on in the world of today and to be informed consumers, citizens, and voters. On a more practical level, the study of international economics is required for numerous jobs in international banking, various government agencies, and international organizations. - Case Study 1-1 The Dell and Other PCs Sold in the US are All but American - Case Study 1-2 What is an “American” Car?. slide 2 1.2 International Trade and the Nation’s Standard of Living International trade is crucial to the well-being of nations FIGURE 1.1. Imports and Exports as a Percentage of GDP in Various countries FIGURE 1.2. Growth of World Production and Trade, 1994-2004 FIGURE 1-3 Rising Importance of International Trade FIGURE 1-3-1 Trade as a Percentage of GDP, 1965-2003 FIGURE 1-3-2 U.S. Imports and Exports as a Percentage of GDP, 1965-2001. FIGURE 1-3-3 Japan’s Imports and Exports as a Percentage of GDP, 1965-2003. FIGURE 1-3-4 Korea’s Imports and Exports as a Percentage of GDP, 1965-2003. FIGURE 1-3-5 China’s Imports and Exports as a Percentage of GDP, 1970-2003. slide 3 FIGURE 1-1 Imports and Exports as a Percentage of GDP in Various Countries in 2001. slide 4 FIGURE 1-2 Growth of World Production and Trade, 1990-2001 (annual percentage changes). slide 5 Trade as a percentage of GDP 90 80 70 Korea, Rep. 60 50 40 Japan 30 China U.S. 20 10 0 1965 1970 1975 1980 1985 Year 1990 1995 2000 FIGURE 1-3-1 Trade as a Percentage of GDP, 1965-2003. slide 6 FIGURE 1-3-2 U.S. Imports and Exports as a Percentage of GDP, 1965-2001. slide 7 16 Percent of GDP 14 12 Exports 10 8 6 Imports 4 2 0 1965 1970 1975 1980 1985 Ye ar 1990 1995 2000 FIGURE 1-3-3 Japan’s Imports and Exports as a Percentage of GDP, 1965-2003. slide 8 50 45 Imports Exports Percent of GDP 40 35 30 25 20 15 10 5 0 1965 1970 1975 1980 1985 Ye ar 1990 1995 2000 FIGURE 1-3-4 Korea’s Imports and Exports as a Percentage of GDP, 1965-2003. slide 9 40 Percent of GDP 35 30 Exports 25 20 15 Imports 10 5 0 1970 1975 1980 1985 1990 Ye ar 1995 2000 FIGURE 1-3-5 China’s Imports and Exports as a Percentage of GDP, 1970-2003. slide 10 1.3 The Major Trading Partners of the U.S., and Korea: The Gravity Model The Gravity Model postulates that the bilateral trade between countries is positively related to the product of the two countries’ GDP and negatively related to the distance between them. Table 1.2a. Major Treading Partners of the U.S. in 2005 Table 1.2b. Major Treading Partners of Korea in 2005 slide 11 Table 1.2b. The Major Trade partners of Korea slide 12 1.4 The Subject Matter of International Economics International economics deals with the economic interdependence among nations. The microeconomic aspects (international trade) - Part One (Chapters 2-7): pure trade theory - Part Two (Chapters 8-12): trade (commercial) policies The macroeconomic aspects (international finance) - Part Three (Chapters 13-15): balance of payments and foreign exchange markets - Part Four (Chapters 16-21): open-economy macroeconomics slide 13 1.5 Purpose of International Economic Theories and Policies Assumptions and merits of economic models Examples slide 14 1.6.1 Current International Economic Problems Trade Protectionism in Advanced Countries Excessive Fluctuations and Large Disequilibria in Exchange Rates Increasing International Competition from China High Structural Unemployment and Slow Grow in Europe Financial Crises in Emerging Market Economies Restructuring Challenge of Transition Economies Deep Poverty in Many Developing Countries slide 15 1.6.2 Current International Economic Problems Sustainable Development (Instructor’s addition) Regionalism and and Faltering (Instructor’s addition) Environment Multilateralism slide 16 1.7 The Globalization Challenge Globalization: Increasing integration of economies around the world, particularly through trade and financial flows. Pros vs Cons slide 17 1.8 Organization and Methodology of the Text Organization (See table of contents.) Methodology of the Text slide 18 Appendix Table 1.3 Commodity Merchandise Trade, 2004 Composition of World Table 1.4 Geographical Composition of World Merchandise Trade, 2004 Table 1.5 Geographical Destination of Merchandise Exports, 2001 Table 1.6 Leading Exporters and Importers of Merchandise, 2001 Table 1.7 Leading Exporters and Importers of Commodity Services slide 19