International Economics Dr Wioletta Nowak
Syllabus International trade and trade theories International factor movements Economic growth and economic development Inequality and poverty and foreign aid Economic globalization
International trade and trade theories
Volume of world merchandise exports, 1990-2012 (indices, 1990=100) Source: World Trade Report, 2013 (www.wto.org)
Growth in volume of world merchandise trade and gross domestic product, 2005-2012 Source: World Trade Report, 2013 (www.wto.org)
Leading exporters in world merchandise trade, 2011-2012 (billion dollars and percentage) Source: World Trade Report, 2012, 2013 (www.wto.org) 2011 2012 Rank Exporters Value Share Rank Exporters Value Share 1 China 1,899 10.4 1 China 2,049 11.2 2 United States 1,481 8.1 2 United States 1,547 8.4 3 Germany 1,474 8.1 3 Germany 1,407 7.7 4 Japan 823 4.5 4 Japan 799 4.4 5 Netherlands 660 3.6 5 Netherlands 656 3.6 6 France 597 3.3 6 France 569 3.1 7 Korea 555 3.0 7 Korea 548 3.0 8 Italy 523 2.9 8 Russia 529 2.9 9 Russia 522 2.9 9 Italy 500 2.7 10 Belgium 476 2.6 10 Hong Kong 493 2.7 27 Poland 187 1.03 27 Poland 183 1.0
World merchandise exports by selected economy 2000-2009 (Million dollars) Source: World Trade Organisation, International Statistics 2010 1600000 1400000 1200000 1000000 800000 600000 Germany China US Italy Belgium Russia 400000 200000 0 1998 2000 2002 2004 2006 2008 2010
World merchandise exports of selected economies 1990-2012 (Million dollars) Source: World Trade Organisation, International Statistics 2013 2500000 2000000 1500000 1000000 Germany China US Italy UK Canada 500000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
World merchandise exports of selected economies 1990-2012 (Million dollars) Source: World Trade Organisation, International Statistics 2013 600000 500000 400000 300000 200000 100000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Italy UK Canada Spain India
World merchandise exports of selected economies 1990-2012 (Million dollars) Source: World Trade Organisation, International Statistics 2013 200000 180000 160000 140000 120000 100000 80000 60000 40000 20000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Poland Austria Turkey Ukraine Portugal
World merchandise exports of selected economies 1990-2012 (Million dollars) Source: World Trade Organisation, International Statistics 2013 50000 45000 40000 35000 30000 25000 20000 15000 10000 5000 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Belarus Slovenia Azerbaijan Croatia
Leading importers in world merchandise trade, 2011-2012 (billion dollars and percentage) Source: World Trade Report, 2012, 2013 (www.wto.org) 2011 2012 Rank Importers Value Share Rank Importers Value Share 1 United States 2,265 12.3 1 United States 2,335 12.6 2 China 1,743 9.5 2 China 1,818 9.8 3 Germany 1,254 6.8 3 Germany 1,167 6.3 4 Japan 854 4.6 4 Japan 886 4.8 5 France 715 3.9 5 6 United Kingdom United Kingdom 680 3.7 636 3.5 6 France 674 3.6 7 Netherlands 597 3.2 7 Netherlands 591 3.2 8 Italy 557 3.0 8 Hong Kong 554 3.0 9 Korea 524 2.9 9 Korea 520 2.8 10 Hong Kong 511 2.8 10 India 489 2.6 24 Poland 208 1.13 26 Poland 196 1.1
Classical and Neoclassical Trade Theory Early Thinking about Trade, Mercantilism David Hume and the Price-specie-flow Mechanism Absolute Advantage in Production Comparative Advantage and the Gains from Trade
The Heckscher-Ohlin Model Factor Abundance, Factor Intensities The Heckscher-Ohlin (H-O) Theorem The Factor-Price Equalization Theorem The Stolper-Samuelson Theorem The Rybczynski Theorem Testing the H-O Model, Leontief Paradox
Alternative Theories of International Trade Trade with Economies of Scale Intra-industry Trade Theory of Overlapping Demands Product Life Cycle Theory Gravity Model
Instruments of Trade Policy Tariffs under Perfect Competition and Monopoly, Tariff Cutting Formulas Non-tariff Barriers (NTBs): Quotas, Voluntary Export Restraints (VERs), Export Subsidies, Technical Barriers to Trade, Sanitary and Phytosanitary Measures, Blue Tariffs, Red-Tape Barriers, Rules of Origin, Antidumping, Countervailing Duty, Safeguards
Trade Agreements and Economic Integration, Arguments for Trade Liberalization Arguments for Trade Protection Optimum Tariff Argument Trade Policy as a Part of Broader Social Policy Protection as a Response to International Policy Distortions Protection to Offset Market Imperfections Infant Industry Argument Strategic Trade Policy
The Balance of Payments Determinants of the Balance of Payments The Exchange Rate and its Determination The Foreign Exchange Market Exchange Rate Regimes
International Factor Movements International Labour Migration Foreign Direct Investment Technological Diffusion
Top Immigration Countries, 2010 Source: Migration and Remittances Factbook, 2011 Rank Country Number of immigrants, million 1 United States 42.8 2 Russian Federation 12.3 3 Germany 10.8 4 Saudi Arabia 7.3 5 Canada 7.2 6 United Kingdom 7.0 7 Spain 6.9 8 France 6.7 9 Australia 5.5 10 India 5.4
Top Immigration Countries, 2010 Source: Migration and Remittances Factbook, 2011 Rank Country Percentage of population 1 Qatar 86.5 2 Monaco 71.6 3 United Arab Emirates 70.0 4 Kuwait 68.8 5 Andorra 64.4 12 Jordan 45.9 17 Israel 40.4 18 Bahrain 39.1 21 Brunei Darussalam 36.4 29 Saudi Arabia 27.8
Top Emigration Countries, 2010 Source: Migration and Remittances Factbook, 2011 Rank Country Number of emigrants, million 1 Mexico 11.9 2 India 11.4 3 Russian Federation 11.1 4 China 8.3 5 Ukraine 6.6 6 Bangladesh 5.4 7 Pakistan 4.7 8 United Kingdom 4.7 9 Philippines 4.3 10 Turkey 4.3
Top Emigration Countries, 2010 Source: Migration and Remittances Factbook, 2011 Rank Country Percentage of population 1 West Bank and Gaza 68.3 2 Samoa 67.3 3 Grenada 65.5 5 Guyana 56.8 9 Albania 45.4 12 Bosnia and Herzegovina 38.9 17 Armenia 28.2 20 Georgia 25.1 21 Kazakhstan 23.6 27 Portugal 20.8
Top 20 investor economies, 2012, (billions of dollars) Source: http://unctad.org/en/
Top 20 host economies, 2012, (billions of dollars) Source: http://unctad.org/en/
Economic Growth and Development Economic growth is the increase in the amount of the goods and services produced by an economy over time. It implies only an increase in quantitative output. Economic development is the increase in the standard of living in a nation's population with sustained growth from a simple, low-income economy to a modern, highincome economy. It refers to social and technological progress and involves improvements in a variety of indicators such as literacy rates, life expectancy, and poverty rates.
Economic Growth Measures Economic Growth National Income and Its Composition, 1919 1938 published in 1941 Simon Kuznets (1901-1985) Gross National Product (GNP) is the market value of all goods and services produced in one year by labour and property supplied by the residents of a country. Gross Domestic Product (GDP) is the amount of goods and services produced in a year, in a country. It is the market value of all final goods and services made within the borders of a country in a year. 1971- Nobel Memorial Prize in Economic Sciences
Economic growth is measured as the percent rate of increase in real gross domestic product GDP (or GDP per capita).
Growth Rate and Welfare Years Country A Country B Country C 1% 5% 10% 0 100 100 100 10 110.46 162.89 259.37 30 134.78 432.19 1744.94 50 164.46 1146.74 11739.09
GDP per capita and Population (World Total) Source: Statistics on World Population, GDP and Per Capita GDP, 1-2006 AD, October 2008 (www.ggdc.net/maddison) Year GDP per capita (constant 1990 US$) Population (in thousands) 1 467 225 820 1000 453 267 330 1500 566 438 428 1600 596 556 148 1700 615 603 490 1820 667 1 041 720 1870 873 1 271 916 1913 1 526 1 791 214 1950 2 113 2 525 501 1970 3 736 3 685 775 1980 4 521 4 433 174 1990 5 162 5 256 680 2006 7 285 6 496 812
GDP per capita and Population (World Total) Source: Statistics on World Population, GDP and Per Capita GDP, 1-2006 AD, October 2008 (www.ggdc.net/maddison) GDP per capita (World Total) Population (World Total)
The Growth of the World Population and Some Major Events in the History of Technology Source: The Growth Report. Strategies for Sustained Growth and Inclusive Development, 2008, (www.worldbank.org)
Nominal GDP, 1980-2012, (Billions of US Dollars) Source: http://www.imf.org United States China Japan Germany
Nominal GDP, 1980-2012, (Billions of US Dollars) Source: http://www.imf.org Germany Poland Azerbaijan
Economic Growth and Development Determinants of Growth and Development. Growth strategies. Development Theories. Measures of Development Sustainable Development. Different Concepts of Convergence. s-convergence and Absolute Convergence.
UHNW ultra high net worth individuals, 2012 Source: World Ultra Wealth Report, 2012-2013 Net Worth UHNW POPULATION TOTAL WEALTH US$ billion $1 billion + 2,160 6,190 $750 million to $999 million 990 855 $500 million to $749 million 2,475 1,560 $250 million to $499 million 8,090 3,225 $200 million to $249 million 13,500 3,035 $100 million to $199 million 22,290 3,335 $50 million to $99 million 56,205 4,295 $30 million to $49 million 81,670 3,280 TOTAL 187,380 25,775
Source: Human Development Report 2010 (http://hdr.undp.org) One-third of the population in 104 developing countries, or about 1.75 billion people, experience multidimensional poverty. The 1.44 billion people live on less than $1.25 a day and the 2.6 billion people live on less than $2 a day.
Inequality and Poverty and Foreign Aid Causes of Poverty in Developing Countries. Poverty Lines. Measures of Poverty. The Millennium Development Goals. Official Development Assistance.
The Bretton Woods Conference (New Hampshire), 1-22 July 1944 The United Nations Monetary and Financial Conference, 730 delegates from 44 Allied nations. Aim: to regulate the international monetary and financial order after World War II. The Bretton Woods system of exchange rate management.
The Bretton Woods Institutions The The International Bank for Reconstruction and Development (IBRD) The International Development Association (IDA) The International Finance Corporation (IFC) GATT/WTO The Multilateral Investment Guarantee Agency (MIGA) The International Centre for the Settlement of Investment Disputes (ICSID)
Attitudes toward globalization
Economic Globalization Arguments for and Against Globalization. Measures of Globalization. Globalization with Human Face.
Recommended Reading P. Krugman, M. Obstfeld, International Economics: Theory and Policy, 7th Edition, Addison-Wesley-Longman, 2005. G. Gandolfo, International Trade Theory and Policy, 2nd Edition, Springer, 2014.
Recommended Reading R. J. Carbaugh, International Economics, 13th Edition, Cincinnati: ITP., 2010. J. Gerber, International Economics, 5th Edition, 2011 R.C. Feenstra, A.M. Taylor, International Economics, Worth Publishers, 2008. E. Helpman, Understanding Global Trade, Harvard University Press, 2011