ECON20001 Lecture Notes - Lecture 20: Technological Change, Weighted Arithmetic Mean, Business Cycle
Document Summary
Openness in goods and financial markets: up till (cid:374)o(cid:449) (cid:449)e assu(cid:373)ed e(cid:272)o(cid:374)o(cid:373)(cid:455) is (cid:272)losed (cid:374)o t(cid:396)ade (cid:894)i(cid:373)po(cid:396)ts/e(cid:454)po(cid:396)ts(cid:895, however, real gdp growth is correlated across countries, co-movement in international business cycle. Openness in markets: only focus on goods and financial market openness, measured by looking at import and export as shares of gdp, technological change allows more goods/services to become tradeable (e. g. ) offshoring. International trade of goods/services: restrictions on trade include tariffs and quotas, purchase and sale of foreign assets, restrictions include capital controls on ownership of foreign assets and foreign ownership of domestic assets. Openness in factor markets: openness in factors of production (labour, capital, ability of firms to choose where to locate operations and workers to choose where to work. Export intensities: export to gdp ratio, other things equal, countries have high export intensities when they are small and/or geographically close to large markets, countries with high export intensities generally have high import intensities.