ECO342Y1 Lecture Notes - Real Wages, Multinational Corporation, Capital Market

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2 Jan 2014
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Topic 1 - convergence, globalization and pre wwi gold standard (september 17th, 24th, oct 1st, october 8th) Pre wwi & post wwii (growth) vs. interwar period (slow growth) Closed down markets in the interwar period; Return of this openness in the post wwii period (e. g. bretton woods organization. Allows countries to have dynamic comparative advantage . Dynamic: feedback from the specialization: you get better at doing it because you are doing it more. Long run average cost goes down ( learning by doing ); as you cut off things you are not good at, you will be able to build bigger/more efficient production ( scale economy ) When opening up the economy, there are opportunities associated with dynamic comparative advantage that could pay off in the long run (globally as well) but sometimes it"s not politically popular. Pre wwi & post wwii bought into this both by accident or by design.

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