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Principles of Economics- Mankiw (5th) 638

Principles of Economics- Mankiw (5th) 638 - 660 PA R T E L...

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660 PART ELEVEN THE MACROECONOMICS OF OPEN ECONOMIES This increase in international trade is partly due to improvements in trans- portation. In 1950 the average merchant ship carried less than 10,000 tons of cargo; today, many ships carry more than 100,000 tons. The long-distance jet was introduced in 1958, and the wide-body jet in 1967, making air transport far cheaper. Because of these developments, goods that once had to be produced lo- cally can now be traded around the world. Cut flowers, for instance, are now grown in Israel and flown to the United States to be sold. Fresh fruits and veg- etables that can grow only in summer can now be consumed in winter as well, because they can be shipped to the United States from countries in the southern hemisphere. The increase in international trade has also been influenced by advances in telecommunications, which have allowed businesses to reach overseas cus- tomers more easily. For example, the first transatlantic telephone cable was not laid until 1956. As recently as 1966, the technology allowed only 138 simultane-
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