MGCR 382 Chapter Notes - Chapter 5: Mercantilism, International Trade, Nationstates

• School: McGill University
• Department: Management Core
• Course: MGCR 382
• Professor: John Saba

Document Summary

Both parties to the transaction who happen to reside in different countries believe they benefit from the voluntary exchange. 4/5 of world trade are goods, 1/5 are services. The quad countries make up more than 50% of the merchandise world export. China passed us to become work"s biggest trading country and world"s biggest exporter. Classical country-based theories of international trade (figure 5 p. 136) Firm based theories developed as mncs rose to power in the mid 20th century (attention shifted to the firm"s role in promoting international trade) These theories are useful to describe patterns of trade in differentiated goods for which brand name is an important part of the customer"s purchase decision. Mercantilism a country"s wealth is measured statitically by the stock of precious metals the country possesses: trade is a zero-sum game (a gain in 1 country necessarily means a loss in the 2nd country )