Post on 19-Dec-2015
ECO 358International Economics
• Professor Malamud• BEH 502• 895 – 3294 Fax: 895 – 1354• Email: bernard.malamud@unlv.edu • Website: http://faculty.unlv.edu/bmalamud
International Economics: The Way the World Works
Objectives:Facts:
the world’s economies and relations between themPrinciples:
Trade flowsCapital flows
Currency exchange ratesAdvantages and disadvantages of fixed and floating rates
Issues:Globalization: Is The World Flat ?!?!
ProtectionRebalancing
International Interdependencies
• Trade: goods, services, raw materials, energy• Finance: exchange rates, foreign debt, foreign
investment (fdi and portfolio investment)• Business: multinational enterprises (MNEs), global
production• Migration: flows of skilled workers, unskilled
workers, family members
World In Recession Unemployment Rate
Country 2007 2009
United States 4.6% 10.5%Japan 3.8% 5.5%Britain 5.3% 7.8%Canada 6.0% 8.5%
EU 9.3%France 7.9% 10.0%Germany 9.0% 7.6%Italy 6.2% 7.4%Spain 8.3% 19.3%
Brazil 9.3% 8.1%Russia 5.9% 9.9%India 7.2% 7.2%China 4.0% 9.0% (1/09)
Trade in goods and services (percent of gdp)
Country % of GDP, 2002 % of GDP, 2006 Exports Imports Exports Imports
Netherlands 53 46 71 63Canada 37 33 46 40Germany 31 25 40 35South Korea 27 26 43 40Norway 31 18 45 28France 22 21 26 27United Kingdom 18 21 26 30United States 9 13 11 15Japan 10 8 11 10
Macro Facts: Trade Deficit, Goods & Services
Today’s Report
Macro Facts: Merchandise Trade Deficit
-7.00
-6.00
-5.00
-4.00
-3.00
-2.00
-1.00
0.00
1.00
2.00
Balance on Unilateral Transfers
Balance on ServicesBalance on Income
Balance on Merchandise Trade
Balance on Current Account
US Current Account TransactionsBalances as % of GDP, 1960 - 2008
Eurozone 16• Germany• France• Italy• Netherlands• Belgium• Luxembourg
• Austria• Ireland• Spain• Finland• Portugal• Greece
• Slovenia• Cyprus• Malta• Slovakia
Trade Issues• If one country gains, must the other lose?
• Think comparative advantage.
• Do imports reduce employment?• Do tariffs/quotas/restrictions save jobs?
• When might they?
• Should weak domestic industries be subsidized?• Is a trade deficit “bad”? Is a surplus “good”?• Does “fair trade” mean that our exports to a
country will equal our imports from it?