01 Introduction to International Trade

01 Introduction to - Introduction to International Economics Agenda International Economics What is International Economics All About International

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1 1 Introduction to International Economics Agenda • What is International Economics All About? • Why Study International Trade? • 7 Major Themes in International Economics. 2 International Economics • International Economics studies the special issues raised by economic transactions between sovereign nations. – The study of international economics is very old. • The first formal exposition was David Hume’s “On the Balance of Trade” in 1758. 3 International Economics • International economics continues to grow in importance with increasing globalization and its backlash. – Globalization is the process of intensifying the connections between national economies through: • International trade in goods and services, • International factor movements, • International flows of money, and • International financial investments. 4 International Economics • We use the same fundamental methods of analysis as other branches of economics. – The motives and behavior of individuals and businesses are the same in international trade as they are in domestic transactions.
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2 5 International Economics • Two broad subfields: – International trade, and – International finance. 6 International Trade • Focuses primarily on transactions of goods and services across countries. – Involves the physical movement of goods and/or – The commitment of tangible resources like labor services. 7 International Finance • Focuses on financial transactions across countries. – Involves the exchange of financial assets. 8 International Trade and Finance • No simple dividing line between the two. – Most international trade involves monetary transactions and – Many international monetary events have important consequences for trade.
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3 9 International Trade • We will focus on international trade. – Develop analytical theories to explain the
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This note was uploaded on 02/25/2012 for the course ECON 181 taught by Professor Kasa during the Spring '07 term at University of California, Berkeley.

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01 Introduction to - Introduction to International Economics Agenda International Economics What is International Economics All About International

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