CAS IR 292 Study Guide - Midterm Guide: Product Differentiation, Single Market, Takers
11 Mar 2016
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Institutions are forums for discussion, ways to set rules: formal institutions = codified by law, clear objectives and powers stated. Informal institutions = power is derived from cultural or social acceptance, customs define appropriate behavior: changes in globalization since 1900, describe the general trends of economic openness and integration among industrial economies since 1900. More financial tools = more ways to do business. More integrated b/c of increased technology for transport and communications, less tariffs and quotas, part of multilateral organizations and regional trade agreements. Less integrated b/c we"re less reliant on trade because we have a larger market. Smaller countries will have higher index of openness scores (higher trade to gdp ratios) because they are more dependent on trade. Big countries will have lower index of openness scores because they trade less. In the long run trade has very little affect on the number of jobs in an economy: domestic macroeconomic policies.
