Internal and International Trade 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Gains from International Trade Adam Smith’s Theory of Absolute Differences in Cost David Ricardo’s Theory of Comparative Cost Haberler’s Theory of Opportunity Cost in International Trade Heckscher-Ohlin Theory or Modern Theory of International Trade Terms of Trade International Trade in Services 1 1.10 1.11 1.12 1.13 1.14 1.15 Meanings of Balance of Payment Structure of Balance of Payment Balance of Payments Disequilibrium Adjustment Mechanism
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country have a propensity to create jobs in this country but increases in imports tend to reduce jobs because the imports displace goods that otherwise would have been made in that particular country by domestic workers‚ which corresponds to the Heckscher-Ohlin Theory‚ whereby the theory predicts that a country exports the products that use its relatively abundant factors intensively and imports the products using its relatively scarce factors intensively. Indirectly‚ factors in abundant supply are exported
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A system of firms with different and complementary functions has grown into this area of “widespread entrepreneurship” with a series of external economies derived from what is called a “common market” characterized by relationships between firms based on competition and‚ at the same time‚ on cooperation. This inter-firm environment and belonging to a socio-cultural system has encouraged the endogenous development of innovation which has spread in an informal manner inside the district and raised
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which became a famous book Bertil Gotthard Ohlin Born on April 23‚ 1899‚ Bertil Ohlin was the founder of the modern theory of dynamics of trade. His research on international trade and capital movement proved to be a turning point in his life. Due to Ohlin’s works and theorems‚ Economics was taken to a higher standard and recognition was brought to it. The Heckscher-Ohlin model faced many criticisms and finally‚ suitable credit was given to it. Ohlin cultivated his love for numbers and trade at
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Special Working Paper Series Globalization and Politics Suzanne Berger MIT IPC Globalization Working Paper 00-005 P1: FMF April 18‚ 2000 15:37 Annual Reviews AR097-03 Annu. Rev. Polit. Sci. 2000. 3:43–62 Copyright c 2000 by Annual Reviews. All rights reserved GLOBALIZATION AND POLITICS Suzanne Berger Department of Political Science‚ Massachusetts Institute of Technology‚ Cambridge‚ Massachusetts 02139; e-mail: szberger@mit.edu ? Key Words internationalization
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more efficiently in other countries The various theories have differing prescriptions for government policy on trade. Mercantilism makes a crude case for government involvement in promoting exports and limiting imports. Smith‚ Ricardo‚ and Heckscher-Ohlin promote unrestricted free trade. Mercantilism is a bankrupt theory that has no place in the modern world. Discuss. In its purest sense‚ mercantilism is a bankrupt theory that has no place in the modern world. The principle tenant of mercantilism
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Understanding Global Trade Elhanan Helpman This draft: August 25‚ 2010 c ° Elhanan Helpman Contents 1 Introduction 1 2 Comparative Advantage 15 2.1 Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 2.2 Factor Proportions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 3 Gainers and Losers 63 3.1 No Distributional Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 3.2
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Direct impact of FDI on poverty reduction FDI’s direct impacts on poverty may work through providing opportunities‚ particularly providing jobs and training to local workers. To the extent that foreign capital inflows do not replace local investment absolutely and foreign investment takes the mode of green- field investment FDI may contribute to reducing existing unemployment and underemployment‚ providing people with income and therefore directly contributing to poverty reduction. In this sense
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Sovereignity- supreme & independent power or authority in government as possessed or claimed by a state or community. Being sovereign nations can be more indifferent to the interests of others. As long as nations exist‚ international economics will always need a separate body of analysis distinct from the rest of economies. Globalization- worldwide integration & development; extending to other or all parts of the world Euro Benefits * Low interest rates due to a high degree of
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1. External economies of scale arise when the cost per unit A. rises as the industry grows larger. B. falls as the industry grows larger rises as the average firm grows larger. C. falls as the average firm grows larger. D. remains constant. E. None of the above. Answer: B 2. Internal economies of scale arise when the cost per unit A. rises as the industry grows larger. B. falls as the industry grows larger. C. rises as the average firm grows larger. D. falls as the average firm grows larger
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