International Trade Notes
Department of Economics
Compiled by Prof E Ziramba
INTERNATIONAL TRADE Only study guide for ECS302-E
UNIVERSITY OF SOUTH AFRICA PRETORIA
© 2010 University of South Africa
All rights reserved Printed and published by the University of South Africa Muckleneuk, Pretoria ECS302E/1/2011 – 2013
iii
ECS302-E/1/2011-2013
CONTENTS
Page 1 1 1.1 1.2 1.3 1.4 1.5 1.6 INTRODUCTION ........................................................................................................... vi INTRODUCTION ............................................................................................................ 1 Introduction .................................................................................................................... 2 The globalization of the world economy ........................................................................ 2 International trade and the nation’s standard of living .................................................... 3 South Africa in world trade ............................................................................................. 3 International economic theories and policies .................................................................. 5 Current international economic problems and challenges ............................................. 5
2 2.1 2.2 2.3 2.3.1 2.3.2 2.3.3 2.3.4 2.4 2.5 2.5.1 2.5.2 2.5.3 2.5.4 2.6 2.6.1 2.7 2.8
WHY NATIONS TRADE: THE CLASSICAL THEORY .................................................. 9 Introduction .................................................................................................................... 9 Mercantilists’ views on trade ........................................................................................ 10 Classical theorists ........................................................................................................ 10 Trade based on absolute advantage (Adam Smith) .....................................................
Compiled by Prof E Ziramba
INTERNATIONAL TRADE Only study guide for ECS302-E
UNIVERSITY OF SOUTH AFRICA PRETORIA
© 2010 University of South Africa
All rights reserved Printed and published by the University of South Africa Muckleneuk, Pretoria ECS302E/1/2011 – 2013
iii
ECS302-E/1/2011-2013
CONTENTS
Page 1 1 1.1 1.2 1.3 1.4 1.5 1.6 INTRODUCTION ........................................................................................................... vi INTRODUCTION ............................................................................................................ 1 Introduction .................................................................................................................... 2 The globalization of the world economy ........................................................................ 2 International trade and the nation’s standard of living .................................................... 3 South Africa in world trade ............................................................................................. 3 International economic theories and policies .................................................................. 5 Current international economic problems and challenges ............................................. 5
2 2.1 2.2 2.3 2.3.1 2.3.2 2.3.3 2.3.4 2.4 2.5 2.5.1 2.5.2 2.5.3 2.5.4 2.6 2.6.1 2.7 2.8
WHY NATIONS TRADE: THE CLASSICAL THEORY .................................................. 9 Introduction .................................................................................................................... 9 Mercantilists’ views on trade ........................................................................................ 10 Classical theorists ........................................................................................................ 10 Trade based on absolute advantage (Adam Smith) .....................................................