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Class0101_Motivation

Class0101_Motivation - Econ 370 – International...

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Unformatted text preview: Econ 370 – International Trade (write this down) Anson Soderbery Email: [email protected] Office: 4040 Rawls Hours: W,F 11:00-12:00 and 2:00-3:00 Course Home: https://webapps.krannert.purdue.edu/kap/ Some reasons I am a fan of trade: Why did I buy this? Part Manufacturer Origin Cost A4 Chip Apple USA 11 Assembly Foxconn?, Quanta, Unknown Taiwan 4 TFT-LCD Screen Sanyo Epson, Sharp, TMD Japan Video processor chip Samsung Korea Touch screen overlay Balda Germany 39 Bluetooth chip Cambridge Silicon Radio UK Chip manufacture TSMC, UMC Taiwan Baseband IC In¡neon Technology Germany WIFI Chip Marvell USA 13 Touch screen control chip Broadcom USA CMOS chip Micron USA NOR Flash ICs Intel, SST USA 73 Display Driver chip Na¢onal Semi, Novatek USA, Taiwan Reasons we should all be interested in trade: • Three central questions about globalization 1. How does it occur? 2. What are the consequences? 3. Why does it occur? • Globalization: How it occurs § Goods market – Trade § Capital markets – Investment § Factor markets – Migration § Intellectual property markets – Ideas § Policy coordination • What’s old? What’s New? – Trade and labor migration has existed in one form or another for thousands of years • European explorers were looking for better trade routes way back when – Multinational firms, intellectual property markets, and vertical specialization in production are all much newer – last 40 years • Technology makes replication relatively easy (IPR is important – you hear about this kid who sold iPhones he made?) • It also makes locating your production elsewhere more feasible (multinationals are huge) International Trade Flows • Dramatic increase in trade since WWII – BUT: the fraction of the economy that is traded is not much higher now than in 1913, prior to WWI – AND: trade is concentrated among close neighbors • 70% of Mexico’s trade, 75% of Canada’s trade, is with US •...
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Class0101_Motivation - Econ 370 – International...

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