IDS A01 Trade and Devlopement Lectu

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International Development Studies
Liang Chen

October 20, 2010. Pg #1 TRADE AND DEVELOPEMENT What is trade? Trade is not always mutually beneficial. 1) One of them may not shehe is getting lack of information before trade 2) Trade is not voluntarily undertaken - hurts one party (colonial power takes advantage of colony through unfair trade even though colony did not agree) Colonial power taking advantage of colony = British over India India did want to have their textile industry shrunk but did not have a choice Voluntary trade = assuming that you will benefit from it 1) trade can be beneficial between individuals People have full info of what getting and giving = voluntary Political leader make decisions country level Country leaders may think they will benefit even if they dont International trade between two countries hurt some and benefit others Canada US and China china has lower wages Canadaus has more capital Each country is going to better at some thing the the other country Will have COMPARATIVE ADVANTAGE! Canada will have advantage in machinery and wheat China advantage in rice and clothing low wage rate = more ppl to make clothes Assumption = both will get what they are not good at Does not benefit everybody in both countries Who is going to benefit? China more clothing = more workers = more wage rate
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