Four criteria for judging the degree of integration:
A.
B.
C.
D.
Four criteria for judging the degree of integration:
A. Trade flows
B. Capital flows
C. People flows
D. Similarity of prices in separate markets
Trade to GDP ratio=
A. In Canada:
B. In USA:
C. In general, smaller countries …
D. Current trade is primarily … . Thus, today’s manufacturers a…
E. There is a growth …
F. Trade today is … 1913.
Trade to GDP ratio= (Exports+Imports)/GDP
A. In Canada: 17% (in 1960); 30.9% (in 2017)
B. In USA: 5% (in 1960); 11.9% (in 2016)
C. In general, smaller countries trade more than larger ones since they cannot efficiently produce a wide range of goods and must depend on trade to a greater extent;
D. Current trade is primarily manufactured consumer goods and producer goods. Thus, today’s manufacturers are more exposed to international competition than was the case in 1900.
E. There is a growth of multinational corporations since 1950.
F. Trade today is qualitatively different than in 1913.
- Capital and Labor Mobility:
A. Labor movement Labor is
B. Capital movement
a. flows of
b. flows of
c. There are many more
d. Many firms today spend significant resources to
e. Costs of foreign
- Capital and Labor Mobility:
A. Labor movement Labor is less mobile internationally than it was in 1900.
B. Capital movement
a. flows of financial capital paper assets: stocks, bonds, currencies, bank accounts, etc.
b. flows of capital representing physical assets: real estate, factories, and business, etc. (foreign direct investment (FDI)).
c. There are many more financial instruments available now than there were a century ago.
d. Many firms today spend significant resources to protect themselves from sudden shifts in currency values. Many economies change from the fixed exchange rate policy to a flexible exchange rate policy.
e. Costs of foreign financial transactions have fallen significantly.
Features of contemporary international economic relations
S… : …
D… : …
Features of contemporary international economic relations
Shallow integration: reduction of tariffs and the elimination of quotas
Deep integration: negotiations over domestic policies that impact international trade
- Issues:
A. Greater interest in the consequences of … makes …
B. Greater participation in the … leads to …
- Issues:
A. Greater interest in the consequences of different domestic policies, makes trade negotiations more difficult and creates widespread discussion of labor, environmental, and other standards that may affect trade flows.
B. Greater participation in the production of single product by firms in multiple countries, leads to concerns about the impact of trade on national economies, employment, and working conditions.
… organizations: EX:
IMF and …
Multilateral organizations: EX:
IMF, the World Bank, GATT later replaced by (WTO), regional trade agreements (NAFTA, EU, APEC, etc.)
Issues with trade:
- More trade may give …, but it also means …
- Capital flows make …, but they also …
- Rising immigration means higher … and lower l…, but it also means m…
- International organizations may …, but they may also reduce …
- Free-trade agreements may …., but again, that means …..
Issues with trade:
- More trade may give consumers lower prices and greater choices, but it also means more competition for firms and workers;
- Capital flows make more funds available for investment purposes, but they also increase the risk of spreading financial crises internationally;
- Rising immigration means higher incomes for migrants and lower labor costs or a better pool of skills for firms, but it also means more competition in labor markets and maybe greater social tensions;
- International organizations may help resolve disputes, but they may also reduce national sovereignty by putting pressure on countries to make operational changes;
- Free-trade agreements may increase trade flows, but again, that means more competition and more pressure on domestic workers and firms.
