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main contributions of the international trade theories - Coggle Diagram
main contributions of the international trade theories
1)FIRST THEORIES: MERCANTILISTS, CLASSICS AND NEOCLASSIC
Mercantilists and the positive trade balance
Firsts systematic elaborations about the international trade
concern for the state, subject and object of monetary policy
The prosperity of a state depends on its capital
capital= gold
increase through a positive trade balance with others nations
its exports value beats the imports value
with a state intervention= protectionism
the world trade volume is unalterable
Smith and absolute advantages
add the effects of the international trade in the economy functioning
The key of a economy wealth is the economy grow
f(work division, workers productivity, wealth generation
LAISSEZ FRAIRE=economy liberalism
because a existing intrinsic natural order
make up a social good
the government has a null margin to intervene effectively in the economy
Allow the exterior trade of national productive surplus
add a new value
for countries with absolute advantage
exchanges its surplus for the goods it wants but has no absolute advantage
Ricardo and comparative advantage
For a existing international trade, the absolute differences aren't necessaries, with the relatives differences its enough
work
only one output factor
work productivity determined by the differences in the quantity of product obtained by work unit
limitations
the real exchange relation is not determined
it should be the opportunity cost
of the countries
H-O Model and abundancy factors
resourcing
productivity factor
comparative advantage source
relative abundance of
factors of production
implications
indirect exchange of the factors
international trade tends to favor abundant domestic factors
a factor sourcing increase
increase the product output
factor price equalization
H-O model empiric problems
predictions are limited
the prediction of the prices equality its conditioned
there are cases of low exportations intensity comparing to its imports
with a high rate of capital-work
2) "INTERNATIONAL TRADE "NEW THEORIES"
Imperfect Competition and Scale Economies
Monopoly competition
the products are exchanged in a market where exists a market dominion
causes
entrance barriers
excepting commodities
hypothesis
scale increasing returns
consumer preferences
reciprocal dumping model
exporting enterprise
exported products
cheaper price
national market
higher price
prices discrimination
Scale economies
external
unity cost depends on industry size
many small enterprises
perfect competition
internal
Unity cost depends on a enterprise size
big enterprises with a price advantage
imperfect competition
Structuralism
Center-periphery
benefits distributions in the international trad is not equitable
favors developed countries more than developing ones
developed countries=specialized in manufactured with a diversified and homogeneous structure
developing countries=produce primary products with a specialized and heterogenous structure
uneven evolution of international trade prices
solution
industrialization of the peripheric economies
Dependency theory
Underdevelopment is an inevitable consequence of the world economic system
produce a commercial, financial and technological dependency
of the developing economien on the developed economies
Intra-Industrial trade: Firsts tries
countries simultaneously
export the same good
between nations with similar level of
development, tastes and preferences
for industrial products trade
comparative advantage= representative demand
from a non-limited point of view
for primary products trade
comparative advantage=factorial sourcing
product life cycle (Vernon-1966)
mature product
new product
standardized product
Evolutionism
capacity for endogenous transformation
driven by
innovation
echnological change
systematic process
caused by systematic interactions between firms and institutions
Strategy politic trade
based on the potential benefits from a tariff or a monetary policy instrument
its purpose is to promote a protect a determined industry sector
modify the strategy interaction produced in a determined sector between national and international enterprises
LAST THEORIES
Global value chains
Implications for international trade
countries specialize in productive activities and not in industries
intermedium products are exchanged until its final assemble
enterprises who coordinate global value chains are located in developed countries
while its providers are firms located in developing countries
Models
changes in the producer way
Enterprises distribute its production around all the word
"good produced by the world"
fast develop on
TIC
low transport costs
trade liberalization
IED
Services
The growing relevance of the services
service exports have become the most dynamic item in world trade
represents 75% of the IED
Represents more than the 60% of the total employment
represents the 7% of the world PIB
Models with services
3 different characteristic of the services trade
services rationed with the international trade=goods trade subproduct
services trade frequently needs IED
good can be produced in different places to where them are consumed, but not the services
The reason of the deindustrialization
depends on the type of country
If it is a developed country
on the supply side, technological progress in manufacturing increases the productivity of the labor factor.
On the demand side, there is a change in consumer preferences.
if it is a developing country
reduce the output and the manufacturer work assignment in developed countries
transferring the productive system through GVCs to developing countries
Exports Complexity
towards a new model
economy complexity
seeks to contemplate
the capabilities
knowledge
infrastructure
logistics
that a country has when it produces a certain good
the economic complexity of exports
resume in two indexes
(ICP)
product complexity index
How complex is it to produce a product based on the productive capacities of the countries?
(ICE)
economy complexity index
products space
good trends to require similar capacities in its output
Critics
goods exported by high-income countries are already supplied by competitive economies
there is a compensation effect
last estudies
Argentina provinces-Plamieri(2017(
How complex is it to produce a product based on the productive capacities of the countries?
the greater the complexity, the greater the value of exports
the most complex provinces have more exporting companies
The greater complexity, most exported products variety
The most complex provinces pay higher wages
Firsts tries
categorize assets according to their desirability in facilitating economic growth
externality
value chains play a important role
socialize the cost discovery of some good
some goods allow a easier transition to others goods then a dynamic process of continue grow
"self-discovery"
PRODY
Productivity-income index
higher index=most product exported by developing countries
low index=most product exported by developed countries
RECENT THEORIES
Stylized facts
good firms become exporters and
not the other way around
the most productive
"self-selection"
Evidence that exporting firms perform better than those participating in the domestic market
pay higher wages
employ a high quantity of employees
higher outcome
most capita and technological intensives
Models with heterogeneous firms
Sunk costs matter
in the entrance to the export market
explain why the aggregate exports answer to different levels of liberalized commerce
export decision depends on
past exporting state
observable characteristics that
affect future export earnings
Causality between productivity
and export status
firms with different outcome levels coexists in a industry because of the uncertainty about their productivity
export decision happens after know its outcome level
most productive firms expand and displace the less productive
industries vary in factorial intensity
enterprises have different productivities
Financial restrictions
firms demand foreign flows to meet costs that cannot be financed by savings
exporter enterprises depends more on financing than the non-exporters
higher foreign demand for domestic bonds
increase the exportations of vulnerable financial sector
increase the economy general credit