Lecture_19_2011 - Lecture19:International Trade,PartI...

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Lecture 19: International  Trade, Part I 2 March 2011
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OPEC and Global Economics:  An   Example of Economic Inter-Connections 1973 OPEC raised price of crude oil by 400% Flow of funds to OPEC from oil-importers OPEC deposits in Western Banks (petrodollars) Massive inflation, 3 rd  world borrowing 1979 2 nd  OPEC price spike Interest rate   to prevent inflation,   recession 3 rd  world states start defaulting on loans Recession deepened (stagflation) 3 rd  World debt crisis of 1990s Era of Market-based reforms in 1990s
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A Primer on Trade Theory Trade  = exchange of goods/services  Specialization  = each state produces the  goods in which it has a comparative  advantage Comparative advantage  = the good(s)  the state can produce most efficiently  relative to other goods States freely exchange resulting  surpluses , and maximize world production
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This note was uploaded on 05/31/2011 for the course PL SC 014 taught by Professor Gartzke during the Spring '99 term at Pennsylvania State University, University Park.

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Lecture_19_2011 - Lecture19:International Trade,PartI...

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