ECO 2117 Lecture 6: ECO 2117 international trade

• School: University of Ottawa
• Department: Economics
• Course: ECO 2117
• Professor: Octavian Strimbu

Document Summary

Global linkages have increased through trade, aid, investment, remittances. Globalization process by which economies in the world become increasingly integrated (economic definition) Globalization carries costs & risks but also benefits & opportunities. In this course we focus on theories of international trade and (domestic) trade policies. Spectacular export success (manufacturing) in east asia, taiwan, south korea, china have been an engine of growth. Export dependence on primary products (coffee, sugar, cotton, minerals, oil) for many other developing countries. Long term (real) price declines price instability. Reliance on imports of sophisticated consumer goods & intermediate production goods for industrialization. Imports need to be financed (exports or lending) Ma(cid:374)(cid:455) ldc(cid:859)s suffe(cid:396) f(cid:396)o(cid:373) (cid:271)ala(cid:374)(cid:272)e of pa(cid:455)(cid:373)e(cid:374)ts instability (big constraint on their development) Balance of payments: current account + capital account. Current account: exports imports debt interest payments. Capital account: loans + investments debt repayments. It must be compensated by a surplus in the capital account.