international trade and business sanna-randaccio (1)fsr/lez1_15.pdf · 2015-02-22 · general due...
TRANSCRIPT
![Page 1: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/1.jpg)
INTERNATIONAL TRADE AND BUSINESS
Sanna-Randaccio (1) •International Economics as a Distinct Subject
•Trade Theory and International Monetary Economics •Recent trends in international trade •Main drivers of international economic integration •Terminology •Course outline •Assessment (final grade)
![Page 2: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/2.jpg)
Globalization Increasing economic integration among nations, resulting in greater interdependence among countries and among citizens of different countries Economic channels •Flows of goods and services •Capital flows •Migration International trade Exchange across national borders of goods and services
![Page 3: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/3.jpg)
US Democratic trade divide will reverberate worldwide Financial Times 30 January 2014 (website)
• Trans-Pacific Partnership • Transatlantic Trade and Investment Partnership ..trade remains an intensely divisive issue within the party ...yet trade unions are wholly unconvinced ..they argue that (previous
agreements) contributed to (income) Inequality World Trade Report 2014 p. 13: Trade is good for jobs but it can put labour markets under pressure to adjust
![Page 4: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/4.jpg)
In the global market: Interaction between sovereign states National borders matters. Institutional context more complex. Asymmetry between factors and goods markets is more relevant than in a close economy Goods Perfect mobility within a single country Perfect mobility between countries (assuming no trade restrictions) Factors Perfect mobility within a single country Perfect immobility between countries
International Economics as a Distinct Subject
![Page 5: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/5.jpg)
International Monetary Theory and Trade Theory
International Monetary Theory Financial transactions, money and the financial assets market have a crucial role essentially of a macroeconomic nature International Trade Theory Real transactions (money is only a veil), exchanges in the form of barter Determinants and impacts of international trade (exchange of goods and services among different countries) microeconomic nature
![Page 6: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/6.jpg)
Recent trends in international trade
• Increasing degree of openness to trade. The phenomenon is not new nor irreversible. • Increasing importance of developing countries in global trade. New major players in the global economy (key role of China). •N-S and S-S trade increase.
• The product mix of developing countries export changes. • Incresing importance of global value chains.
• Trade composition. • FDI growth.
![Page 7: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/7.jpg)
WTO World Trade Report 2014, p. 18
Increasing degree of openness to trade. The phenomenon is not new nor irreversible.
![Page 8: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/8.jpg)
World Trade Report 2007
Increasing degree of openness to trade. The phenomenon is not new nor irreversible.
![Page 9: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/9.jpg)
Increasing degree of openness to trade. The phenomenon is not new nor irreversible.
Baldwin and Martin, 1999
![Page 10: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/10.jpg)
Increasing degree of openness to trade. The rapid increase in recent years.
World trade report 2013, p. 23
![Page 11: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/11.jpg)
Toniolo, 2013
Increasing importance of developing countries in the global economy
![Page 12: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/12.jpg)
Increasing importance of developing countries in the global economy
WTO, World Trade Report 2014, p. 63
![Page 13: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/13.jpg)
New major players in the global economy
World Trade Report 2013 p. 59
![Page 14: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/14.jpg)
New Actors?
World trade report 2013 p. 50
![Page 15: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/15.jpg)
Increasing importance of developing countries in global trade.
![Page 16: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/16.jpg)
Increasing importance of developing countries in global trade
WTO, World Trade Report 2014, p. 34
![Page 17: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/17.jpg)
World Trade Report 2013 p. 65
Increasing importance of developing countries in global trade.
![Page 18: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/18.jpg)
GOODS •Manufacturing Sector •Natural Resources (e.g. minerals and oil) •Agricultural Products SERVICES MANUFACTURING SECTOR • 65% of world export of goods • 20% of world GDP
Trade Composition
![Page 19: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/19.jpg)
Trade Composition
World trade report 2014, p.25
![Page 20: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/20.jpg)
Trade in Goods
World trade report 2013, p. 54
![Page 21: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/21.jpg)
Foreign Direct Investments
UNCTAD, World Investment Report 2013, p. XVI
![Page 22: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/22.jpg)
The increasing integration of global markets: main determinants
•Technological change leads to a fall in natural barriers (ICT technologies result in lower costs for transferring information)
•Liberalization policies reduce/eliminate artificial barriers
![Page 23: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/23.jpg)
Course outline
Part I: Trade Theories Part II: Trade Policy (tariffs, subsidies, etc,) Part III: Multinational Enterprises and Foreign Direct investments
![Page 24: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/24.jpg)
Course outline ( Part I)
Microeconomics tools for the neoclassic general equilibrium theory Determinants: differences between countries and comparative advantage (perfect competition). 1) The Classical Theory The Ricardian model (focus on the technological differences between countries ) 2) The Neoclassical Theory The Heckscher-Ohlin model (focus on differences in factor endowments) Determinants: economies of scale and imperfect competition. Countries trade to exploit economies of scale in production and more in general due to imperfect competion in product markets - Monopolistic competition - Oligopoly and international trade
![Page 25: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/25.jpg)
Inter-industry trade: simultaneous import and export of commodities belonging to different industries (textiles and computers, etc.)
Intra-industry trade: simultaneous import and export of commodities belonging to the same industry (import and export of automobiles with different characteristics, different types of beers, etc.)
![Page 26: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/26.jpg)
AUTARCHY FREE TRADE (Closed economy) (No barriers)
Protectionism
Exchange Liberalization
![Page 27: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/27.jpg)
International trade is given by the difference between production and consumption of each good in a specific country. Considering two goods X and Y
If the country import X
If the country export Y
We need a general equilibrium model to analyze production and demand in the given economy and the interaction between the different markets.
Production: Transformation Curve Demand: Social (Community) Indifference Curves
![Page 28: INTERNATIONAL TRADE AND BUSINESS Sanna-Randaccio (1)fsr/LEZ1_15.pdf · 2015-02-22 · general due to imperfect competion in product markets - Monopolistic competition - Oligopoly](https://reader034.vdocuments.us/reader034/viewer/2022042108/5e887f641dd5a93b215a8d1a/html5/thumbnails/28.jpg)
Programme: course website. Syllabus. Textbooks.
Exercises: Tuesday in class.
Assessment: written exam after the completion of the course (90%), class participation (10%). Four questions.