国际经济学英文版第十章.ppt

1、Chapter 10,International Trade and Economic Growth,Topics to be Covered,Economic Growth and Development Economic Development Strategies: Primary Export-led Strategy Import-substitution Strategy Outward-looking Strategy Neutral Economic Growth Protrade vs. Antitrade Biased Growth Types of Technologic

2、al Change International Flows of Labor and Capital Economic Analysis of Labor Migration,Economic Growth,An economy is said to grow when its total real output or gross domestic product (GDP) rises. Per capita GDP is a measure of a countrys standard of living. For standard of living to rise over time,

3、 GDP must grow faster than the population.,Economic Development,Economic Developmentrefers to the achievement of a quality of life for the average citizen of a country that is comparable to that enjoyed by the average citizen of a country with a modern economy, such as the U.S. Economic development

4、is characterized by: High levels of consumption Broad-based educational achievement Adequate housing Access to high-quality health care, etc. Economic growth is essential for economic development.,Strategies for Economic Development,Primary Export-led Development Strategy Import-Substitution Develop

5、ment Strategy Outward-looking Development Strategy,Primary Export-Led Development Strategy,This strategy involves policies designed to exploit natural comparative advantage by increasing production of a few export goods most closely related to the countrys resource base. Country examples include Col

6、umbia (coffee), Mexico and Nigeria (petroleum), and Malaysia (rubber).,Advantages of Primary Export-led Development Strategy,This strategy would encourage more intensive use of existing or abundant resources. It could help attract foreign investment. It may provide linkage effects or benefits to oth

7、er industries as a result of one industry expanding.,Arguments Against Primary Export-led Strategy,The world markets for primary products do not grow fast enough to support this type of development. The prices of primary products relative to the prices of manufactured goods will tend to fall over ti

8、me due to sluggish demand or oversupply.,Terms of Trade of Developing Countries,Refer to Figure 10.1 Terms of trade of oil exporting countries have experienced sharp increases; non-oil exporters have more stable, albeit declining, terms of trade. A group of countries with market power can improve it

9、s terms of trade by restricting supply. The declining terms of trade of non-oil exporters is more likely due to policies of other developing countries (i.e., OPEC) than to market conditions in developed countries.,FIGURE 10.1 Terms of Trade of Developing Countries,Import-Substitution Development Str

10、ategy,These policies are designed to promote rapid industrialization and development by erecting high barriers to foreign goods to encourage local production.,Arguments Against Import-substitution Strategy,The high barriers to trade rarely come down. This strategy limits the development of industrie

11、s that supply inputs to the protected industries. Imported capital goods are used extensively in local production. The strategy encourages citizens to spend scarce resources to lobby or bribe government officials to protect their industries.,Outward-Looking Development Strategy,These policies involv

12、e government identifying or targeting industries in which the country has potential comparative advantage. Successful country examples include Japan, South Korea, Singapore, and Taiwan. Refer to Table 10.1 for more examples.,TABLE 10.1 Trade Reforms in Selected Developing Countries,Trade and Growth,

13、Economic growth is shown graphically as an outward shift of the countrys production possibility frontier (PPF). Since growth affects both production and consumption, then it also affects international trade.,Graphical Analysis: An Economy Before Growth Occurs,Refer to Figure 10.2 Given PPF and terms

14、 of trade line, show: Equilibrium production point Equilibrium consumption point PR line with slope indicating the initial ratio of production of the two goods CR line with slope indicating the ratio in which the two goods are consumed,FIGURE 10.2 Patterns of Production and Consumption with Neutral

15、Growth,Neutral Economic Growth,A proportionate increase in all resources and consumption so that trade also expands proportionately to the growth of the economy. After growth, the economy continues to produce and consume the two goods in the same ratios as before growth (refer to Figure 10.2).,Condi

16、tions Necessary for Neutral Growth,Graphically, the new production possibility frontier (PPF) must be a proportionate expansion of the old PPF. Consumption of both goods must increase by the same proportion as income increases. In other words, the income elasticity of demand for both goods must be e

17、qual (see Table 10.2).,TABLE 10.2 Example of Neutral Economic Growth,Other Types of Growth,Pro-trade Biased Growth Anti-trade Biased Growth,Pro-trade Biased Growth,When growth occurs as a result of an increase in the resource used intensively in the production of export goods, then the output of exp

18、ort goods will rise relative to import production, and international trade will expand by more than the rate of growth of GDP. This is called pro-trade biased growth (refer to Figure 10.3 and Table 10.3). Graphically, the PR line rotates away from the CR line.,FIGURE 10.3 Location of Production Foll

19、owing Protrade Biased Growth,TABLE 10.3 Example of Protrade Biased Growth,Anti-trade Biased Growth,When growth occurs as a result of an increase in the resource used intensively in the production of import goods, then the output of import goods will rise relative to the output of export goods, and t

20、he international trade of this country will fall. This is anti-trade biased growth (refer to Table 10.4). Graphically, the PR line rotates toward the CR line indicating a tendency toward autarky.,TABLE 10.4 Example of Antitrade Biased Growth,Technological Change,Technological (technical) changeoccur

21、s when the same amount of output can be produced with fewer factor inputs, or when the same amount of inputs can produce greater amounts of output.,Types of Technological Change,Neutral technological changean innovation that reduces by an equi-proportionate amount the quantity of factors required to

22、 produce a given level of output. Labor-saving (capital-saving) technological changean innovation that leads to a reduction in the use of labor (capital) relative to other factors in the production of a given level of output.,Industry Effects of Technical Change,If neutral technical progress occurs

23、in one industry, the output of that industry will increase at the expense of the other. If technical progress allows an industry to save on the use of the factor it uses less intensively, then the output of that industry could rise or fall.,Economic Growth and Terms of Trade for a Large Country,With

24、 neutral economic growth, the terms of trade of the large country will tend to fall as the country grows. Pro-trade biased growth will cause the terms of trade to deteriorate more than under neutral growth. Anti-trade biased growth will lead to an improvement in the terms of trade.,Immizerising Grow

25、th,Immizerising Growthgrowth that results in a reduction of the countrys welfare level. Refer to Figure 10.4 (next slide).,FIGURE 10.4 Immizerizing Growth,Is Immizerising Growth Common?,No, because: Precise conditions on both the nature of growth and world demand must hold. Government policy (e.g.,

26、tariffs) can be used to counteract the negative effects of growth.,Dutch Disease,The phenomenon of a boom or good fortunes for one part of a countrys economy eventually leading to very bad times for the economy as a whole is known as the Dutch disease. Refer to Global Insights 10.1 The Dutch Disease

27、,International Flows of Factors,Labor and migration Capital and multinational corporations,Labor Flows,The U.S., Canada, Australia, and other countries have experienced large inflows of migrants (see Table 10.5). Migration has resulted from government policies such as: Guest worker program (Europe)

28、in which foreign workers are invited to temporarily relocate and work in a host country,TABLE 10.5 U.S. Immigration, 182020051,Reasons for Migrating,Better economic circumstances in another country. Refuge from political tyranny or devastation. Reunion with other family members.,Brain Drain vs. Braw

29、n Drain,Brain Drainprocess whereby skilled workers leave their homeland and relocate abroad. Brawn Drainthe outflow of unskilled workers to other countries.,U.S. Capital Flows,In the 19th century, the U.S. was a capital-importing country. For much of the 20th century, the U.S. was a capital exporter

30、. Since 1985, the U.S. has moved from being the worlds largest net creditor to being the worlds largest net borrower.,Direct Foreign Investment and MNCs,Direct Foreign Investmenthappens when a domestic firm acquires ownership or control of the operations of a foreign firm. Multinational Corporations

31、 (MNCs)firms that own and operate capital in one or more foreign countries.,Features of U.S. MNCs,Manufacturing accounts for the largest share of U.S. MNC employment (refer to Table 10.6 Employment of Nonbank U.S. MNCs). Almost 70% of U.S. MNC employment is in developed countries, primarily in Weste

32、rn Europe (refer to Table 10.7).,TABLE 10.6 Employment of Nonbank U.S. MNCs in 2006 (worldwide, parent, and affiliate),TABLE 10.7 Employment of U.S. MNC Foreign Affiliates, by Area, 2006,What Special Advantages do MNCs Have?,MNCs may have access to special technology. There may be increasing returns

33、 to scale that accrue to a firm operating plants in many locations.,Outsourcing,Outsourcingthe movement or shifting of production by a firm to a foreign location. See Global Insights 10.2 for more details.,Economic Analysis of Factor Movements,The case of labor migration Definition of terms: Margina

34、l Product of Labor (MPL) Diminishing Returns to Labor Value of Marginal Product of Labor (VMPL) Profit-maximizing Rule Effects of immigration of foreign workers,Marginal Product of Labor (MPL),MPLthe additional amount of output that can be produced with the addition of one more worker to the production process.,Diminishing Returns,Diminishing returns to laborthe fact that as more and more workers are added to the production process, holdi