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Rethinking the theories of international trade, Strategic commercial…
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Mercantilism
Mercantilism thought
Concern for the State, subject and object of economic policy
the prosperity of a State depends on the accumulation of the capital (gold) and the stable global trade.
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Superavit in the trade balance benefits the economy of the respective country if the amount of exports exceed the value of imports
propose greater state intervention in the international trade. This would happen with the protectionism, aiming fot more exports and less imports in the country.
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assumes that the wealth of the world is fixed, this does not have mutual or share advantages for the nations that are related with international trade.
there are no trading partners seeking mutually
favorable agreements, but rival nations
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classic theory
David Ricardo (1817)
Not neccessary to have absolute advantages to increase the well being of the citizens or keep the international trade.
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Assumptions
Productivity or technical coefficients are constant within each country, but may vary due to the different techniques.
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country will export the good it produces with the lowest opportunity cost, measured in terms of another good. This is the opposite to the imports.
SAID
what matters are the relative relative advantages, not absolute advantages
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Adam Smith
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he incorporates the real effects of international trade on the functioning of the economy by valuing the welfare it can bring to citizens. It does not mean that it renounces the general interests of the nation, but rather that these are assured with greater individual welfare
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Assumptions
Man's primary drive as an economic being is the desire for profit. This could be know as the egoistic actions but the group of them create the social good.
by seeking his own advantage, each individual is led by an "invisible hand" to promote an end that was not in his mean goals. With this in mind the state has the smallest participation in the economy if not a null value.
SAID
The best is to let the economic process take its course; a thesis that came to be known as laissez faire, economic liberalism or non-interventionism.
For growth Adam proposes the labor division, where the productivity of workers would increase, production costs and economies of scale would become cheaper. Foreign trade would be incurred where a product whose domestic demand is slight would be exchanged while importing one that is really in demand.
This is known as absolute advantage, where the country with an absolute advantage in a good specialized in it and then exchange it for goods where he does not have the advantage.
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Intra-industrial trade
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LINDER (1961)
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The good will only be susceptible to being exported if it has first been the object of strong domestic demand.
Strong domestic demand means comparative advantage, so the product can be exported but to the country that wil consume it
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Estructuralism
center periphery
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trade gains were important for developing countries producing primary goods, so they should continue to export developing countries producing primary goods, so they should continue to export raw materials and import manufactured goods.
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in the center, productivity increases in industry translate into higher wages and higher wages
In the periphery, increases in agricultural productivity generate an overabundance of labor,
which cannot be adjusted by emigration to the central countries.
dependency theory
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relations between center and periphery eliminate
any possibility of development in underdeveloped countries.
commercial, financial and technological dependence of the periphery on the center
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Hume
SAID
That with the flow-species mechanism the persistent positive trade balances would be counterbalanced by an eventual increase in the domestic price level.
Superavit-> would increase the quantity of money and, therefore, the price level in that country.
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