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Who are the winners and losers of the integration of the world's…
Who are the winners and losers of the integration of the world's economies?
Benefits of Intl trade
Absolute and Comparative Adv
gains from trade
sources of comparative advantage
opportunity costs
Limitations of the theory of Comparative Adv
Benefits:
increased competition
lower prices
greater choice
acquisition of resources
more foreign exchange earnings
access to larger markets
economies of scale
more efficient resource allocation
more efficient production
Trade Protectionism
Arguments for:
protection of infant (sunrise) industries
national security
health and safety
environmental standards
anti-dumping
unfair competition
balance of payments correction
govt revenue
protection of jobs
Economically Least Developed Country (ELDC) diversification
Types of Trade Protection:
tariffs
quotas
subsidy/ export subsidy
administrative barriers
Arguments against:
misallocation of resources
retaliation
increased costs
higher prices
less choice
domestic firms lack incentive to become more efficient
reduced export competitiveness
Free Trade vs Trade Protection
Economic Integration
Preferential Trade Agreements
bilateral
regional
multilateral (WTO)
Trading Blocs
free Trade Areas/ Agreements
customs Unions
common Markets
Advantages:
greater access to markets offer potential EoS
with freedom of labour there are greater employment opportunities
membership in a trading bloc may allow for stronger bargaining power in multilateral negotiations
greater political stability and cooperation
Trade Creation (HL)
Disadvantages
:
loss of sovereignty
challenge to multilateral trading negotiations
Trade Diversion (HL)
Monetary Union
advantages and disadvantages (HL)
WTO
objectives & functions
factors affecting the influence of the WTO, including 1) difficulties of reaching agreement on services/primary products, and 2) unequal bargaining power of members
Exchange Rates
Floating exchange rates
determination, depreciation and appreciation
Shifters
foreign demand for exports
domestic demand of imports
inward/outward FDI
inward/outward portfolio invesment
remittances
speculation
relative inflation rates
relative interest rates
relative growth rates
central bank intervention
Consequnces of FX rate changes
inflation rate
econ growth
unemployment
current a/c balance
living standards
Fixed FX rates
devaluation and revaluation
how fixed rates are maintained
Managed FX rates
overvalued and undervalued currencies
Fixed vs floating systems
Balance of Payments
credit and debit items
surplus or deficiti on an account
Components
Current a/c
balance of trade in goods
balance of trade in services
income
current transfers
Capital a/c
capital transfers
transactions in non-produced, non-financial assets
Financial a/c
FDI
-portfolio investment
reserve assets
official borrowing
interdependence between the accounts
zero balance in BoP
credits = debits
deficits = surpluses
relationship between the current a/c, & financial a/c and the fx rate
Implications of a persistent current a/c deficit
exchange rates
interest rates
foreign ownership of domestic assets
debt
credit ratings
demand management
econ growth
Methods to correct a persistent current a/c deficit
expenditure switching
expenditure reducing
supply-side policies
Effectiveness of these policies
Marshall-Lerner Condition and the J-curve effect
Implications of a persistent current a/c surplus
domestic consumption and investment
fx rates
inflation
employment
export competitiveness
Why is economic development uneven?
Sustainable Development
meaning of sustainable development
Sustainable Development Goals
relationship between sustainability and poverty (HL)
Measuring Development
the multidimensional nature of economic development
Single Indicators
GDP/GNI per person (per capita) at PPP
health and education indicators
economic/social inequality indicators
energy indicators
environmental indicators
Composite indicators
Human development Index (HDI)
Gender Inequality Index (GII)
Inequality adjusted Human Development Index (IHDI)
Happy Planet Index
Stengths and limitations of approaches to measuring econ dev
Possible relationship between econ growth and econ dev
Barriers to economic growth and/ or development
Poverty traps/ poverty cycles
Economic Barriers
rising econ inequality
lack of access to infrastructure and appropriate technology
low levels of human capital: lack of access to healthcare and education
dependence on primary sector production
lack of access to international markets
informal economy
capital flight
indebtedness
geography including landlocked countries
tropical climates and endemic diseases
Political and social barriers
weak institutional framework: legal system, ineffective taxation structures, banking system, property rights
gender inequality
lack of good governance/corruption
unequal political power and status
Significance of different barriers to economic growth and/or economic development
Economic growth and/ or development strategies
Strategies to promote economic growth and/or economic development
Trade Strategies
import substitution
export promotion
economic integration
Diversification
Social enterprise
Market-based policies
trade liberalisation
privatisation
deregulation
Interventionist policies
redistribution policies including tax policies, transfer payments and min wages
Provision of merit goods
education programs
health programs
infrastructure including energy, transport, telecommunications, clean water and sanitation
Inward FDI
Foreign Aid
humanitarian aid/ development aid
debt relief
Official Development Assistance (ODA)
Non-Governmental Organisations (NGOs)
Multilateral development assistance
World Bank
International Monetary Fund (IMF)
Institutional change
improved access to banking, including microfinance and mobile banking
increasing women's empowerment
reducing corruption
property rights
land rights
Strengths and limitations of strategies
Strengths and limitations of govt intervention vs market-oriented approaches
Progress toward meeting selected SDGs in the context of two or more countries.
Global