International Economics
International economics
Kap1
International trade * Globalization * Many definitions * The process that makes trade, transport, transactions, exchange of information and mobility across national (and other) borders and across long distances, cheaper and easier. * Globalization is long run trend for all societies, * Technological globalization * Political globalization *
Size Matters: The Gravity Model
Technology * Technology for transport and communication * Sail * Steam * Combustion engines * Railroad * Telegraph
→ → * Telephones * Internet
Political globalization * Self sufficiency * Tariffs * Control with capital movements * EU * WTO * ”Similar” economic system
* Who trades with whom?
Generally trade increases with the size of each trading partner (total GDP) and decreases with the distance between them.
Size Matters: The Gravity Model * 3 of the top 10 trading partners with the U.S. in 2008 were also the 3 largest European economies: Germany, U.K., and France. * These countries have the largest gross domestic product (GDP) in Europe. * GDP measures the value of goods and services produced in an economy. * Why does the U.S. trade most with these European countries and not other European countries?
Other things besides size matter for trade: 1. Distance between markets influences transportation costs and therefore the cost of imports and exports. * Distance may also influence personal contact and communication, which may influence trade. 2. Cultural affinity: if two countries have cultural ties, it is likely that they also have strong economic ties. 3. Geography: ocean harbors and a lack of mountain barriers make transportation and trade easier. 4. Trade Policy: 5. Multinational corporations: corporations spread across different nations import
Kap1
International trade * Globalization * Many definitions * The process that makes trade, transport, transactions, exchange of information and mobility across national (and other) borders and across long distances, cheaper and easier. * Globalization is long run trend for all societies, * Technological globalization * Political globalization *
Size Matters: The Gravity Model
Technology * Technology for transport and communication * Sail * Steam * Combustion engines * Railroad * Telegraph
→ → * Telephones * Internet
Political globalization * Self sufficiency * Tariffs * Control with capital movements * EU * WTO * ”Similar” economic system
* Who trades with whom?
Generally trade increases with the size of each trading partner (total GDP) and decreases with the distance between them.
Size Matters: The Gravity Model * 3 of the top 10 trading partners with the U.S. in 2008 were also the 3 largest European economies: Germany, U.K., and France. * These countries have the largest gross domestic product (GDP) in Europe. * GDP measures the value of goods and services produced in an economy. * Why does the U.S. trade most with these European countries and not other European countries?
Other things besides size matter for trade: 1. Distance between markets influences transportation costs and therefore the cost of imports and exports. * Distance may also influence personal contact and communication, which may influence trade. 2. Cultural affinity: if two countries have cultural ties, it is likely that they also have strong economic ties. 3. Geography: ocean harbors and a lack of mountain barriers make transportation and trade easier. 4. Trade Policy: 5. Multinational corporations: corporations spread across different nations import