WorldTrade

WorldTrade - International Trade Globalization - one of the...

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1 International Trade Globalization - one of the most controversial and divisive subjects of our time Remarks by Chairman Alan Greenspan Conference on Bank Structure and Competition, sponsored by the Federal Reserve Bank of Chicago, May 2004. Globalization has altered the economic frameworks of both advanced and developing nations in ways that are difficult to fully comprehend. Nonetheless, the largely unregulated global markets, with some notable exceptions, appear to move effortlessly from one state of equilibrium to another. Adam Smith's “invisible hand” remains at work on a global scale.
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2 Many challenge the benefits of international trade. For example, Lori Wallach, leader of the anti-WTO protests in Seattle: While the macroeconomic indicators have often looked good, real wages in many countries have declined, and wage inequality has increased both within and between countries”. NGO declaration at the UN Conference on Women: “The global economy governed by international financial institutions, the WTO, and multinational corporations proposes structural adjustment for countries in the South in the name of fiscal health. The result is increasing poverty, debt, and unemployment”. But many are also confident about the benefits of trade: President Bill Clinton, speaking at the World Economic Forum: We have to reaffirm unambiguously that open markets are the best engine we know of to lift living standards and build shared prosperity”.
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3 To understand the debate we have to look at the economics of trade Introduction to the main explanations of why countries trade in goods and assets. Two parts: 1. International Trade : exchange of goods and services among residents of different countries ( Three lectures ) 2. International Finance : International payments and exchange rates ( Three lectures ) World Trade has been growing more quickly than World Income 0 200 400 600 800 1000 1200 1400 1600 1800 1960 1964 1968 1972 1976 1980 1984 1988 1992 1996 2000 2004 Index 1960=100 World Exports World GDP
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4 MAIN QUESTIONS z Why do countries trade? z What do they trade? z What are the gains (or losses)? z Is everybody benefiting? China’s Trade, 2005 (Selected commodities) +3.1 0.3 3.4 Vegetables (054 and 056) 0.0 0.5 0.4 1.4 0.8 11.4 20.3 41.1 21.0 19.8 11.8 5.4 Imports ($ billions) -14.1 6.2 Scientific equipment (87) -34.7 6.4 Electronic microcircuits (7764) Note: Numbers in parenthesis are the commodity codes from the Standard International Trade Classification. Source: United Nations, Statistical Division (unstats.un.org/unsd/comtrade). +1.8 1.8 Corn (044) +14.0 14.5 Toys (894) +12.6 13.0 Shoes and other footwear (85) +50.7 52.1 Clothing and accessories (84) +9.7 10.5 Audio equipment (763) +29.6 41.0 Computers (752) -17.0 4.0 Special industrial machinery (72) -18.1 1.7 Crude petroleum (333) -11.5 0.3 Metal ores (28) -5.3 0.1 Soybeans (2222) Net Exports ($ billions) Exports ($ billions)
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5 Japan’s Trade, 2005 (Selected commodities) 61.4 7.0 68.4 Automobiles (781) 3.3 0.4 2.9 3.1 19.5 4.4 6.2 45.9 8.9 39.3 Imports ($ billions) -19.0 0.5 Clothing and accessories (84) -3.1 0.0 Shoes and other footwear (85) -1.3 1.6 Medical instruments (872) -2.9 1.5 Aircraft (792) 14.6 17.9 Iron and steal (67) 0.1 0.5 Soaps and cleaners (554) Note: Numbers in parenthesis are the commodity codes from the Standard International Trade Classification.
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This note was uploaded on 02/28/2008 for the course FBE 526 taught by Professor Imrohoroglu during the Spring '08 term at USC.

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WorldTrade - International Trade Globalization - one of the...

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