...Fair Trade: International Trade and World Output AIU Online/MGMT 220 Charlotte Taylor May 6, 2012 Abstract A business process that is affected by consumer demand, international trade, is a vital necessity in order for economies to stay afloat, expand, and to enhance the welfare of society. However, if trade should cease, the goods we have or wish to obtain would become unaffordable or maybe not available at all. In addition, the people begin to make fewer choices about purchasing products. Introduction International trade and world output both have direct and indirect effects on the economy (Griffin, et al., 2010). Therefore, in a world where trade is very vital it is critical to comprehend the relationship between international trade and world output. In addition, this paper will explain the broad pattern of international trade, describe a product that might no longer be obtainable here in the United States if trade would cease; and provide one other nation and the product that the country can do without. Relationship: International Trade and World Output Trade is when one person voluntary exchange goods, services, assets, and money with another person, or organization. Since, the transaction is voluntary; all parties must accept that they will gain something from the exchange before completing the transaction. International trade is a business process between countries, individuals, or other business associations. It is usually referred to as world or foreign...
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...Individual Project MGMT220-1202B-01 Introduction to International Business May 6, 2012 Abstract When you talk about international trade and world output, you will be describing the relationship between supply and demand. We will be discussing and providing example which is the specific countries which are the United States and China. International trade is the buying and sale exchange of goods and services between two countries. (Griffin, Pustay 2010) International trade is very important for any country to do business with another country specially in exporting of goods and services and also to import goods and services into a country which the country do not have readily accessible too. Trade between two countries provides good choices for the consumer and jobs for many people in difference country. 1. Explain the relation between international trade and world out. The given quantity of world output within a year will cause some changes in the international trade. When countries slow down on it economic output the international trade in volume will slow down. The same thing will happen when the world output is higher the international trade will be higher. Trade will go up and down do, to the consumer not spending to buy or sale their goods and services. When a recession is in a country the consumer will not buy or sale their goods and services. The exchange rates will cause problem in international trade. When a country currency begin to weaken which...
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...JOURNAL OF CONTEMPORARY RESEARCH IN BUSINESS EFFECT OF TRADE DEFICIT ON THE ECONOMY OF PAKISTAN Mohsin Abbas Superior University, Lahore, Pakistan Hassan Raza (Corresponding author) University of Lahore, Lahore, Pakistan Abstract This study has conducted to find the effects of trade deficit on the economy of Pakistan in which trade deficit is the independent and gross domestic product, foreign direct investment exchange rate are the dependent variables. Depending on the availability of data we have selected the longest possible sample period to avoid the small sample bias. A sample period of 24 years has been selected for this study for the period of 1988-2011 with annual frequency. We use histogram, scatter plot matrix and the correlations ordinary least square method of regression has been used for the analysis.Histogramof exchange rate show rupees value against U.S dollar are continuously decrease. FDI is also not good, Gross domestic product (GDP) of the Pakistan is also very low trade,In histogram also represent the trade volume (TV) in which imports of Pakistan is very high while export is low. Scatter plot show the positive relationship dependent and independent variables except trade volume. So its result shows if the government working on these variables then trade deficit should automatically decrease like 2003 and 2004 in which our export are more as compare to import .correlation coefficient of trade deficit with gross domestic product, foreign direct investment...
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...The topic of my report is the impact of international trade for the appreciation of RMB exchange rate and related suggestion In my report, the RMB is selected as the target currency. I think this is because China is the biggest developing country in the world. China ranks the first in terms of international trade. And recently，many countries request China appreciate RMB exchange rate. Although the international trade develops very well in China, but one cannot be ignored in fact is that most of these output products from labor-intensive industries. It means there just exist a little profit in per product. So the output will be influenced a lot by the adjustment of exchange rate. That if the appreciation of RMB exchange rate good or not becomes a hot topic. In my report, I try to analyze the reason of the appreciation RMB exchange rate. I will analyze it from China aspect first, and then the reason from the world. In this part, I need various statistics to support my viewpoint. For example, the chart of the history statistics and expert idea. And then I will analyze the impact of international trade for the appreciation of RMB exchange rate. I this part, I will analyze the benefit of the impact of international trade for the appreciation of RMB exchange rate and the drawback of that. In terms of benefit. I will analyze about the relation as to international trade with other countries such as trade conflict between China and American or the internationalization...
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...Vertical Specialization and the Changing Nature of World Trade David Hummels, Dana Rapoport, and Kei-Mu Yi T he world’s economies have become increasingly integrated and increasingly global. Among the most important and often cited features of the rise in globalization is the enormous growth in the export and import shares of GDP since World War II. In the United States, international trade— that is, exports plus imports—accounted for 23.9 percent of GDP in 1996, up from 9.2 percent in 1962.1 Worldwide, the merchandise export share of production has more than doubled over the last forty-five years, while the manufactured export share of production has almost quadrupled (Chart 1). Most countries—emerging nations as well as highly developed economies—have experienced increases in their export share of GDP (Chart 2). Clearly, a greater number of countries are trading more today than in the past. David Hummels is an assistant professor of economics at the University of Chicago’s Graduate School of Business; Dana Rapoport is an assistant economist and Kei-Mu Yi an economist at the Federal Reserve Bank of New York. Another significant feature of increased globalization is the internationalization of production. Rather than concentrate production in a single country, the modern multinational firm uses production plants—operated either as subsidiaries or through arm’s-length relationships—in several countries. By doing so, firms can exploit powerful locational advantages...
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...Why has world trade grown faster than world output? By Mark Dean of the Bank’s International Economic Analysis Division and Maria Sebastia-Barriel of the Bank’s Structural Economic Analysis Division. Between 1980 and 2002, world trade has more than tripled while world output has ‘only’ doubled. The rise in trade relative to output is common across countries and regions, although the relative growth in trade and output varies greatly. This article attempts to explain why the ratio of world trade to output has increased over recent decades. It provides a brief review of the key determinants of trade growth and identifies proxies that will enable us to quantify the relative importance of the different channels. We estimate this across a panel of ten developed countries. This will allow us to understand better the path of world trade and thus the demand for UK exports. Furthermore this approach will help us to distinguish between long-run trends in trade growth and cyclical movements around it. Introduction In the past few decades there has been an increasing integration of the world economy through the increase of international trade. The volume of world trade(1) has increased significantly relative to world output between 1980 and 2002 (see Chart 1). Some of this increase can be accounted for by the fact that traded goods have become cheaper over time relative to those goods that are not traded. However, even in nominal terms the trade to GDP ratio has increased over this...
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...“A Study of International Marketing Application in Foreign Trade in India” Authors: Nader Angoutin Research Scholar in Commerce, University of Kerala, Trivandrum. Email:Nader_Angoutin@yahoo.com Abstract This paper analyses the Study of International Marketing Application in Foreign Trade in India. The study argues the international marketing as simple extension of exporting, whereby the marketing miss is simply adapted in some way to take into account differences in consumers and segment. International marketing research really plays an important role in the marketing research. The study will help in understanding the application of international marketing and knowing the socio economic, foreign trade and financial economic effects. This will fill a critical gap as not much information is available in the context of International Marketing Application in Foreign Trade in India. Keywords: International Marketing- Foreign Trade INTRODUCTION: International marketing is simply the application of marketing principles to more than one country. However, there is a crossover between what is commonly expressed as international marketing and global marketing, or across national borderlines. The intersection is the result of the process of internationalization. Many American and European authors see international marketing as simple extension of exporting, whereby the marketing miss is simply adapted in some way to take into account differences in consumers...
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...Hierarchicality of Trade Flow Networks Reveals Complexity of Products Peiteng Shi1, Jiang Zhang1*, Bo Yang2, Jingfei Luo1 1 School of Systems Science, Beijing Normal University, Beijing, China, 2 Ministry of Commerce of the People’s Republic of China, Beijing, China Abstract With globalization, countries are more connected than before by trading flows, which amounts to at least 36 trillion dollars today. Interestingly, around 30{60 percents of exports consist of intermediate products in global. Therefore, the trade flow network of particular product with high added values can be regarded as value chains. The problem is weather we can discriminate between these products from their unique flow network structure? This paper applies the flow analysis method developed in ecology to 638 trading flow networks of different products. We claim that the allometric scaling exponent g can be used to characterize the degree of hierarchicality of a flow network, i.e., whether the trading products flow on long hierarchical chains. Then, it is pointed out that the flow networks of products with higher added values and complexity like machinary, transport equipment etc. have larger exponents, meaning that their trade flow networks are more hierarchical. As a result, without the extra data like global input-output table, we can identify the product categories with higher complexity, and the relative importance of a country in the global value chain by the trading network solely. Citation:...
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...intensive. There are two factors, one is labor and the other one is capital. In this context, the theorem shows that there is a positive relationship between the changes of the price of an output and the changes in the price of input factor used in a higher percentage (intensively) (for example: labor intensive or capital intensive) in producing the final product. And there is a negative relationship between changes in the price of an output and changes in the price of the factor not used intensively in producing that product. To explain the theorem, we can have a look at the real world and think about what happens when the U.S. ( a capital abundant and labor scarce country) takes part of the international trade. Would the high-waged labor lose because of international trade? This is the first thing I would ask myself, and it seems to be logical that labor will lose competitiveness with other labor abundant countries, and therefore labor would lose because of international trade. Samuelson and Stolper demonstrated that free trade lowers the real wage of the scarce factor and raises that of the abundant factor compared to autarky and that protection raises the real wage of the scarce factor of production and lowers the real wage of the abundant factor of production. How did they demonstrate it? A small country select a tariff as a trade barrier. As a result, this will increase the price of the import good in comparison with the exported good. In case of homogenous products...
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...Journal of Business, Economics & Finance (2012), Vol.1 (2) Manni and Ibne Afzal, 2012 EFFECT OF TRADE LIBERALIZATION ON ECONOMIC GROWTH OF DEVELOPING COUNTRIES: A CASE OF BANGLADESH ECONOMY Umme Humayara Manni1, Munshi Naser Ibne Afzal1 1 Universiti Brunei Darussalam, Faculty of Business, Economics and Policy Studies, Brunei. ABSTRACT The objective of this paper is to assess the impact of trade liberalization on Bangladesh economy between the periods 1980 to 2010. This research analyzes the achievements of the economy in terms of important variables such as growth, inflation, export and import after trade liberalization. The paper uses simple Ordinary Least Square (OLS) technique as methodology for empirical findings. The analysis clearly indicates that GDP growth increased consequent to liberalization. Trade liberalization does not seem to have affected inflation in the economy. The quantitative analysis also suggests that greater openness has had a favourable effect on economic development. Both real export and imports have increased with greater openness. Liberalization policy certainly improves export of the country which eventually leads higher economic growth after 1990s. The findings of this study can be an interesting example for trade liberalization policy study in developing countries. KEYWORDS Trade liberalization, economic growth, developing countries, Bangladesh economy, OLS technique, openness, export, import, inflation 1. INTRODUCTION Like many...
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...j o u r n a l h o m e p a g e : w w w. e l s ev i e r. c o m / l o c a t e / e n e c o Economic impacts of higher oil and gas prices The role of international trade for Germany Christian Lutz a,⁎, Bernd Meyer a,b a b Institute for Economic Structures Research (GWS), Osnabrueck, Germany University of Osnabrueck, Germany a r t i c l e i n f o a b s t r a c t The analysis concentrates on direct and indirect price increases, induced shifts in international trade and structural changes in the oil importing economies. The paper at hand asks, whether a stabilizing effect via international trade and domestic structural change on the GDP of oil importing countries can be observed, if a permanent oil price increase occurs. At least for Germany, structural change from consumer goods to investment goods industry and an improvement of international competitiveness limit negative impacts of increased energy prices. Analysis is based on the extensive and disaggregated global GINFORS model and the detailed INFORGE model for the German economy. © 2009 Elsevier B.V. All rights reserved. Article history: Received 15 July 2008 Received in revised form 13 January 2009 Accepted 27 May 2009 Available online 6 June 2009 JEL classification: Q43 C53 C67 F17 Keywords: Global modelling Energy prices and the macro economy International trade 1. Introduction Oil price shocks have negative impacts on oil importing countries. There seems to be evidence for this plausible result from the...
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...International Economy Global recession is a situation many economists fear could happen if actions today are not implemented. Fixing the economy cannot be done by only addressing one issue as the economy is an intertwinement of different areas combined. A change in one area has effects on others just as not making changes can affect other areas too. Preventive measures in the areas of global productivity, monetary and fiscal policy, and increasing international trade could keep the world from entering this kind of recession. By being proactive citizens of the world the global economy could overcome current conditions. If some of today’s issues are not resolved or addressed the world could face real economic hardships. Increasing Global Productivity by Increasing Employment When one thinks of efficiency in productivity and productivity costs usually coincide with job cuts and lower wages. However, according to Okun’s Law, there is a 1 to 2 ratio when comparing unemployment to loss of real output (Schiller, 2008). This relationship means the more employed individuals a nation has the higher the production possibility can be. The higher number of unemployed individuals the lower the production possibility is. Decreasing unemployment globally will maximize global output. Increases in global output can have beneficial effects on demand and supply, inflation, and the Gross Domestic Production Per Capita for the entire world. Monitoring Monetary and Fiscal Policies Government...
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...way is to see if those who benefit can compensate others who lose and still be better off. Aggregate gains from trade can be shown as followed: In a country that cannot trade, the output of a good must equal its consumption. If DC is consumption of cloth and DF consumption of food, then in a closed economy, Dc=Qc and Df=Qf With trade the value of consumption still needs to be equal but the mix of goods can be different The left hand side is the level of food imports in the domestic economy which is determined by the relative price of cloth and the economy’s cloth exports. Eq. 4.7 is therefore the budget constraint BC slope: Consuming one less unit of cloth gives you Pc extra which can buy you Pc/Pf units of food. Before trade if an economy produces at a point like 2, after trade it can achieve anything within the shaded region. The set of feasible points are then where the BC is in the shaded area. BC slope: Consuming one less unit of cloth gives you Pc extra which can buy you Pc/Pf units of food. Before trade if an economy produces at a point like 2, after trade it can achieve anything within the shaded region. The set of feasible points are then where the BC is in the shaded area. Gains from trade: In the absence of trade the economy would have to consume what it produced on the production possibility frontier. An economy that trades can consume more of both goods and hence it may be possible in principle to give each individual more of both goods...
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...International Macroeconomics1 Stephanie Schmitt-Groh´2 e April 26, 2013 Mart´ Uribe3 ın 1 The seeds for this manuscript were lecture notes taken by Alberto Ramos in a course on International Finance that Mike Woodford taught at the University of Chicago in the Winter of 1994. 2 Columbia University. E-mail: stephanie.schmittgrohe@columbia.edu. 3 Columbia University. E-mail: martin.uribe@columbia.edu. ii Contents 1 Global Imbalances 1.1 Balance-of-Payments Accounting . . . . . . . . . . . . . . . . 1.2 The Current Account . . . . . . . . . . . . . . . . . . . . . . 1 1 5 1.3 The Current Account and the Net International Investment Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 1.4 Valuation Changes and the Net International Investment Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 1.5 The Negative-NIIP-Positive-NII Paradox: Dark Matter? 1.5.1 1.5.2 . . 20 Dark Matter . . . . . . . . . . . . . . . . . . . . . . . 22 Return Differentials . . . . . . . . . . . . . . . . . . . 23 1.6 Who Lends and Who Borrows Around the World? . . . . . . 26 1.7 Exercises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 35 2 Current Account Sustainability 2.1 Can a Country Run a Perpetual Trade Balance Deficit? . . . 35 2.2 Can a Country Run a Perpetual Current Account Deficit? . 39 2.3 Savings, Investment, and the Current Account . . . . . . . . 41 iii iv 2.3.1 CONTENTS Current Account Deficits...
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...affect the volume of exports and imports. It can also affect the allocation of manufacturing of goods, reserve money, exports, imports and balance of payments. Exchange rate volatility provides chances to domestic investors to invest in foreign currency to obtain higher profits and thus domestic currency undervalue and foreign currency gain values. Moreover, this volatility of exchange rate directly influences the prices of exports, imports, reserve money, manufacturing productions and their growth rates. Traders and investors always support the system where the discrepancy of the difference between actual and expected value of exchange rate is minimized but some traders and investors like volatile exchange rate, which can maximize their earnings. Sengupta and Sfeir (1995) state that there are two reasons of what exchange rate volatility has achieved a particular result in the international trade. One is thatthe impact of exchange rate volatility raises level of exports, improves balance of...
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