October 4 International Economy

October 4 International Economy - October 4 2007...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
October 4, 2007 International Economy Theory of Comparative Advantage Countries specialize in exporting those things they can produce at the lowest relative cost Depends on what is available in each country Advantage is gained by using most abundant factors and importing items that require factors of production they don’t posses Problems with this Theory Trade equals growth, growth does not equal development, thus trade does not equal development Benefits are not equally distributed Harms local producers of items that are not the primary product Few spin-off effects Declining terms of trade Export Promotion Theories Free trade is the key—manufacture competitive goods to trade in global markets Intra-firm Trade: Subsidiaries sell to parent company South-South Trade: creation of regional trading blocks within 3rd world nations Cartelization: commodity cartels like OPEC Neo liberal Model Modernization not dependency Ideal is free operation of unrestricted markets
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 2

October 4 International Economy - October 4 2007...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online