Chap018 - Chapter 18 International Trade and the Developing...

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Chapter 18 – International Trade and the Developing Countries CHAPTER 18 INTERNATIONAL TRADE AND THE DEVELOPING COUNTRIES Learning Objectives: To become familiar with the various characteristics of developing countries. To learn how greater openness to trade can potentially contribute to more rapid economic growth. To understand the problems of export instability and terms-of-trade deterioration faced by developing countries. To comprehend the nature of and potential solutions to the external debt problems of developing countries. I. Outline Introduction An Overview of the Developing Countries - A Closer Look at the Least Developed Countries - The Ratio of Trade to GDP - Primary Commodity Exports - Marginalization from Global Trade Flows - Closed Trade Regimes - Trade Liberalization, Growth, and Poverty The Role of Trade in Fostering Economic Development - The Static Effects of Trade on Economic Development - The Dynamic Effects of Trade on Development - Export Instability - Potential Causes of Export Instability - Long-Run Terms-of-Trade Deterioration Trade, Economic Growth, and Development: The Empirical Evidence Trade Policy and the Developing Countries - Policies to Stabilize Export Prices or Earnings - Problems with International Commodity Agreements - Suggested Policies to Combat a Long-Run Deterioration in the Terms of Trade - Inward-Looking versus Outward-Looking Trade Strategies The External Debt Problem of the Developing Countries - Causes of the Developing Countries’ Debt Problem - Possible Solutions to the Debt Problem Summary 18-1
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Chapter 18 – International Trade and the Developing Countries II. Special Chapter Features Titans of International Economics: Raul Prebisch (1901-1986) and Hans Wolfgang Singer (1910-2006) In The Real World: The Length of Commodity Price Shocks In The Real World: Comecon Foreign Trade Pricing Strategies In The Real World: Terrorism and Its Effect on Developing Countries III. Purpose of Chapter The purpose of this chapter is to review the general links between international trade and economic development and to summarize key problems that exist (or are alleged to exist) with respect to developing countries and their trade sector. Possible causes and consequences of the potential trade difficulties are examined. Policy options are considered that might help to obtain a more favorable contribution of trade to development and to accelerate growth in the less developed countries (LDCs). The chapter concludes with a specific focus on the debt problem of the developing countries. Some possible solutions to this debt problem also are suggested. IV. Teaching Tips A. U.S. college students often have little conception of the vast differences between their own living standards and those in the LDCs. Table 1 provides data necessary to understand the economic conditions in developing nations. The chapter then takes a look at the least developed countries in the world and the myths associated with their trade.
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Chap018 - Chapter 18 International Trade and the Developing...

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