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HNDEconomicsTheWorldEconomy世界经济学报告

HNDEconomicsTheWorldEconomy世界经济学报告
HNDEconomicsTheWorldEconomy世界经济学报告

Economics 2: The World

Economy

Rework

Content

Introduction----------------------------------------------------------------3

Section 1: International Trade

Three gains from trading internationally---------------------------------------3

Free

Trade--------------------------------------------------------------------------3

Absolute and Comparative Advantage-----------------------------------------3

Protectionism----------------------------------------------------------------------4

Barriers to

trade-------------------------------------------------------------------4

WTO and EU----------------------------------------------------------------------5

Section 2: International Finance

Balance of Payments and General trends in UK Trade----------------------6 Relationship between the exchange rate and the balance of payments—14 Single

Currency------------------------------------------------------------------15

Effects on individuals and business of the Euro-----------------------------15

Section 3: Less Developed Countries (LDCs)

Characteristics of a LDC--------------------------------------------------------16

Current issues that face LDCs--------------------------------------------------16

The impacts of multinationals on LDCs and NICs--------------------------16 Conclusion-----------------------------------------------------------------16

References------------------------------------------------------------------17

Introduction:

As a member of the government of nation on the periphery of Europe, it is my obligation to illustrate the benefits of joining the EU to the Premier. In this report, I will analyze 15elements in next three parts to make a clear explanation of benefits of joining the EU.

Section 1: International Trade

Three gains from trading internationally:

To begin with, the international trade could increase world out-put. The tendency of globalization brings the firms more opportunities to gain the labor, resources, contracts and new technology. The supply and demand will be improved with the improvement of company’s productivity.

Once the supply has been improved, the goods and services were produced at lower cost and there are more and more competitions, the price of the product might fall which means consumers could get more choices and cheaper goods.

In addition, the most important gaining of international trade is it can generate economic growth. Free trade could increase sales, profit margins, and market shares and the both demand and supply level has updated. Meanwhile, the producer needs more resources, labor and capital to produce more to satisfy the global market. It direct result in improving the material market, finance market, and may decline the unemployment rate.

Free trade

Free trade is a concept that there is no barrier to goods and services exchanged between countries. Since different countries have different terrain, weather, resources and technology, the international trade would bring the goods which are more valuable than the local people produce it by themselves.

A good example for free trade is in , 2004, Chinese President and Chilean President declared the start of the FTA negotiations. According to the agreement, the two countries would start tariff reduction of goods trade from July 1, 2006. Tariff of products accounting for 97% of the total of the two countries would be zero in ten years. China and Chile would carry out free trade in education, science & technology, environment protection, labor, social security, IPR, investment and promotion, mineral and industry. This agreement has promoted the free trade between China and Chile successfully. Absolute and comparative advantage

Absolute advantage refers to the ability of a particular person or a country to produce a particular good with fewer resources than another person or country. Absolute advantage is said to occur when one country can produce a good or service to pre-determined quality more cheaply than anther country. It stands contrasted with the concept of which refers to the ability to produce a particular good at a lower . Opportunity cost is defined as the cost of choosing a good or service measured in terms of the next best alternative given up. A country has a comparative advantage in producing a good if the opportunity cost of producing that good in term of other goods is lower in that country than it is in other countries.

Example: Korea and Japan have following production possibilities for two commodities, mobile phones and computers; assume that all the resources owned by each country are same.

It is clear that Japan has an Absolute advantage over Korea in both commodities. But the advantage it has is much greater for mobiles. Using the

same resources as Korea it can make twice as many mobile phones.

For Japan the ‘cost’ of 1 Mobile phone is 10 bales of Computers, . 20000/2000 For Korea it is 15, . 15000/1000

But if we look at the case of computers we will find that here for Japan the cost of a bale of computers is one-tenth of a Mobile phone while for Korea it is one fifteenth. In terms of the output of Mobile phone foregone (opportunity cost), computer is cheaper in Korea than Japan. Korea has a Comparative advantage in computer while Japan has comparative advantage in mobile phone.

Protectionism

Protectionism is the economic policy of restraining trade between nations, through methods such as high tariffs on imported goods, restrictive quotas, a variety of restrictive government regulations designed to discourage imports and anti-dumping laws in an attempt to protect domestic industries in a particular nation from foreign take-over or competition.

Here are two examples of protectionism:

1: Britain imports bananas from its ex-colonies in South America while USA owns huge banana plantations in South America. In 1999 Britain refused to import bananas from South America, so the US government slapped tariffs on

some British-made goods. The most serious one was a punitive tariff of 100% on Scottish wool products in order to limit the import from Britain.

2: Another example of protectionism is in January, 2009, American government settled a policy that only the American steel can be used in America. The American government tended to use this policy to reduce the loss in financial crisis and it helps the steel workers to keep their jobs. In this example, protectionism protects the domestic lower-skilled labor and domestic industries.

Barriers to trade

To protect a country’s own industries, the country which in adverse side need to find some ways to be barriers to limit the import products, usually, the two methods are—tariff and non tariffs.

Tariff is taxes or customs duties placed on foreign products to artificially raise their prices and this hopefully, suppresses domestic demand for them. This tax may be ad value, that is, a percentage of the price of the goods or specific, that is, a tax per unit of weight or physical quantity.

For example, in January 12, 2009 the Russian government raised the expropriation tariff (up to 30 percent) for the cars import in the next nine months. The import car’s price will be increased to be WP (price for the whole world) adds the tariff, since the price is increasing, the sales of

the import cars must fall down. The customers might choose the Russian car instead of import cars since it is cheaper.

Non-tariff barriers traditionally have been actions such Quotas, embargoes, exchange control and import deposits. Probably the best known of these is the quota. This is a physical limitation on the quantity of import. Quota is a physical limitation on the quantity of imports which had been acknowledged by local laws. Usually the importers need to apply to pay for a license to sell goods.

For instance, Russia uses another method to limit foreign car import since 2008—to limit the quantity of import; only a few companies which have the import license could import cars and have a selling upper limit. Russia uses these methods to restrict the import quantity, and during the government limited foreign goods import, it can promote the domestic industries. WTO and EU

In 1948, the General Agreement on Tariffs and Trade (GATT) was established by the developed countries. In 1 Jan 1995, the GATT was supplanted by a new institution, the World Trade Organization (WTO) and aims to improve trade and investment flows around the world. It is an international body seeking to promote free trade by opening markets through the elimination of import tariffs. The organization administers trade agreements, monitors international trade policy and acts as a forum for trade negotiations. The

four main goals of WTO are: freeing global trade through universally lowered tariffs, imposing the same rules on all members in order to homogenize the trade process, spurring competition through lowered subsidies, and ensuring the same trade concessions for all member nations. The WTO also provides technical assistance and training for developing countries. WTO aims for equal representation among members by granting each member country "most-favored nation" status; when a member country bestows a trade privilege on another nation, the privilege must be extended to all other member countries. Another tenet is "national treatment," which behooves countries to treat foreign imports equally with those produced domestically.

The best example for joining the WTO is the join of China in 2007, after that, China achieves lots of benefits from the decrease of tariff, limitations and the simplification of trading procedures.

EU stands for European Union and is an economic union, which aims to abolish tariffs and quotas among members, common tariff and quota system, restrictions on factor movements and harmonization and unification of economic policies and institutions. It draws out regulations, monitors member states, solves disputes and problems among member states and negotiates with other countries or international organizations on the behalf of EU members. The European Union aims to promote and smooth free trade among internal European Union and initiatives for simplifying national and

community rules include simpler legislation for the internal market (SLIM) and European Business Test Panel. For example, in Oct 16, 2009, EU and Korean government signed a free trade agreement of 100 billion US dollars after two years’negotiation and EU will cancel the tariffs on imports of textile and cars from Korea in the next three years. This will promote the free trade of EU and have positive impact on the economy.

Section 2: International Finance

Balance of Payments and General trends in UK Trade

Balance of payment is the name given to the record of transactions between the residents of the country and the rest of the world over a period of time. It is a key economic statistics and UK’s Balance of Payments is comprises by the current account, the capital account, the financial account which deals with flow of direct portfolio and investments and reserve assets and the International Investment Position which shows the Stock of External Financial Assets and Liabilities. The chart below shows the composition if Balance of Payments in 2008:

a) The current account can be divided into four categories: trade in goods, trade in service, income and current transfers. Positive net income from abroad corresponds to a current account surplus; negative net income from abroad corresponds to a current account deficit.

Here are the trade figures of recent years:

Here are the Current Account Balance Chart and the Chart of trade in Goods and services of UK in last 20 years.

The current balance has usually been in deficit over the last 30 years. The UK has recorded a current account deficit in every year since 1984. Prior to 1984, the current account recorded a surplus in 1980 to 1983. From 1984 to 1989, the current account deficit increased steadily to reach a high of billion pounds in 1989, equivalent to per cent of Gross Domestic Product (GDP). From 1990 until 1997, the current account deficit declined to a low of billion pounds in 1997. Between 1998 and 2006, the current account deficit widened sharply, peaking at billion pounds in 2006. This was the highest recorded in cash terms but only equated to per cent of GDP. In the past two years, there has been a reduction in the current account deficit –in 2008 it currently stands at billion, equivalent to per cent of GDP.

It is obvious that UK had a large deficit in trade of goods in the last 30 years and the deficit becomes lager and increases greatly from 1998 to 2008 while the surplus of trade in service grows smoothly but not as markedly as the goods deficit. The trade in goods account recorded net surpluses in the years 1980 to 1982, largely as a result of growth in exports of North Sea oil. Since then however, the trade in goods account has remained in deficit. The deficit grew significantly in the late 1980s to reach a peak of billion

in 1989, before narrowing in the 1990s to levels of around 10 billion to 14 billion. In 1998 the deficit jumped by over 9 billion, and it has continued to rise since, reaching a cash record of billion in 2008.

There are two different of Income—Direct Investment Income and Portfolio Investment Income. The Direct Investment Income means the profits earned by UK companies from overseas branches and associated company. And the Portfolio Investment Income is the interest on bonds and dividends, held abroad by UK companies and residents.

Here are charts of income over the 10 years:

The income section has shown positive growth from 2006 to 2008 and is very much in surplus recently.

As for the current transfer, it also has two different parts:

The taxes, payments and receipts to the EU, Social Security Payments abroad, and military expenditure abroad is the Central Government Transfer. And for Other Sector Transfers, it includes receipts from the EU Social Fund, taxes on income and wealth paid by UK workers and businesses to foreign governments, insurance premiums and claims.

There is the Chart of Current transfer in last 10 years

The transfers account has shown a deficit in every year since 1960. The

deficit increased steadily to reach billion in 1990. In 1991, the deficit reduced to billion, reflecting billion receipts from other countries towards the UK’s cost of the first Gulf conflict. The deficit has since increased, to reach a record billion in 2008.

b) Compared with Current Accounts, the composition of the Capital and Financial Account is more complicate.

Capital Account has two categories:

Capital transfer: It is investment grants by the government and debts which the government has agreed with the creditor do not need to be met. Acquisition and disposal of non produced/nonfinancial assets: Purchase or sales of property by foreign embassy or patents, copyrights, trademarks, franchises and leases.

The capital account has shown strong steady surplus growth especially from the year of 2006 to 2008.

The financial account has four categories and here are the charts of the four categories over the last ten years:

According to these graphs, investment increased dramatically from the mid-1990s, reflecting the increased globalization of the world economy. Between 2000 and 2007, other investment dominated cross-border investment,

primarily banking activity. In 2008 however, other investment, has recorded net disinvestment as the global financial crisis deepened leading to a reduction in loans internationally and a repatriation of deposits. In recent years, including the latest, the UK has needed to borrow from abroad to finance a continuing current account deficit, which has resulted in inward investment (UK liabilities) exceeding outward investment (UK assets).

c) The international investment position is the balance sheet of the stock of external assets and liabilities. Between 1966 and 1994 the UK’s assets tended to exceed its liabilities, by up to a record billion pounds in 1986. But from 1995 to 2007, the UK recorded a net liability position in every year, reaching a record billion pounds in 2006. In 2008, the UK returned to a net asset position of billion pounds mainly due to exchange rate effects. The chart below indicates UK’s international investment position: Relationship between the exchange rate and the balance of payments

The exchange rate is the price of a currency in terms of other currencies. Its effect on balance of payments will depend upon its relationship with other currencies and how its value will change. As the currency weakens (devalues) the exports will become cheaper abroad but the country has to pay more for imports but the goods and services would become internationally cheaper and lead to more goods a services being purchased. If demand remains the same then the value of goods and services to the country will reduce and the current

account balance may deteriorate. If the exchange rate rises then the country’s goods and services might suffer and demand from abroad could fall. If the demand remains the same however then the value of exports will rise and the current account balance should improve.

For instance, when the UK market needs to import American goods (such as corns) the exchange market in UK would be the demand of dollars is larger than the supply of UK pounds. If the American markets needs import more British goods, they need to exchange more pounds in the currency market, so the both of demand of US Dollar and supply of UK Pounds is increasing, meanwhile, the exchange rate of £/$ is increasing. UK pound is more valuable means the goods of UK are usually more expensive and American people need to spend more US dollars compared to the same amount of pounds. That is why the currency exchange rate is so important for the balance of payments. For example, if the exchange rate of £/$ is increasing, the American business man might not choose UK goods, because of the high price.

Single Currency

European single currency Euro came to exist since 1999. There are 12 member states of EU who use Euro while UK is still not one of the members since there are both advantages and disadvantages to join it.

Advantages:

At firstly, the single currency reduces the exchange rate uncertainty because people don't have to convert money from one currency to another when purchase goods. Meanwhile, using the single currency will increase foreign investment such as direct inward investment since the reduction of uncertainty. Then it may produce a great transparency. Whether people buy or sell goods, consumers can compare price in a single currency. It will help to decrease the scope for price discriminations and create pressure to lower the price. Moreover, it could maintain interest rate lower and the commitment to low inflation should allow economies to operate with lower cost. Disadvantages:

A country may lose the independent monetary policy if it joins the single currency. The single currency forces a country to forgo an independent monetary policy. After the single currency has been used, the country's monetary policy will determined by the supranational central bank and not by the domestic central bank. This is why the theory of optimal currency areas emphasizes the importance of flexible prices, labor mobility and fiscal transfers. Flexible prices and labor mobility become more important when a currency union exists; governments have an incentive to make markets work more efficiently.

Besides, there are also political costs to the country. If the government loses control over monetary policy to the supranational central bank,

politicians are limited to using fiscal policy to influence economy. Effects on individuals and business of the Euro

As for the individuals,they can get lower prices and higher quality goods and services when they have more choices due to increased competition among companies through the Euro zones; they can measure the good price through Europe and choose the best one. In addition, single currency reduces the transaction costs of traveling in Europe. Individuals could travel more frequently than past since it is more convenient and cheaper. People do not need to concern the exchange rate and commission fee when visiting the other countries in Europe.

As for the business, people could avoid the exchange rate risk and traders do not need to waste time and cost on purchasing foreign currencies. Moreover, the business market could be expanded there are more opportunities. Section 3: Less Developed Countries (LDCs)

Characteristics of a LDC

Less Developed Countries (LDCs) mainly exist in Asia and Africa. Most LDCs’subsistence is agriculture. The land of LDCs is very ineffectively used and is very low in productivity, there are normally no modern techniques or equipment available, and the land is always threatened by floods or droughts. The birth rates in LDCs are very high but there is very heavy infant mortality

since the health care system is poor.

A good example for LDC is Angola. A 2007 survey concluded that low and deficient niacin status was common in Angola. Many regions in this country have high incidence rates of tuberculosis and high HIV prevalence rates. Angola has one of the highest infant mortality rates in the world and one of the world's lowest life expectancies.

Current issues that face LDCs

The World Bank offers aid programs to Angola to support the health care system of Angola to reduce the infections of HIV but the aid programs they get from the World Bank of IMF carry conditions which they feel are difficult to comply with, and are expensive.

Besides, the indebtedness of Angola keeps increasing year on year. This makes Angola almost impossible to borrow more.They borrow a huge amount of money to develop their economy, purchase foreign goods and service. However, the high interest or other factors make debts become a great stress on LDCs. They are in the trip of debts, which prevent the development of their economy. The impacts of multinationals on LDCs and NICs

Now days, there are more and more multi-national firms which have branches in various countries since it can reduce the labor, material, transport cost. Companies from newly industrialized countries tend to be MNCs. A good example

for multinationals on NICs and LDCs is Great Wall Computer Corporation from China. This company invests 120 million dollars to build a new factory in Algeria to expand its market and increase 34 percent of its foreign sale income. The company offers more jobs to the people in Algeria thus increase the employment and income of Algerian. The company also brings new technology to this less developed country. However, the company transfers most of profits back to China and uses their financial strength to impose their will in host counties either.

Conclusion

After analyzing these 15 elements, you may have a clear acknowledge of the international trade, finance and LDCs and as for the economic environment of the whole area, it can be benefit to join the EU. It will enhance our country’s economic growth by attracting more free capital, using single currency and enlarge the market.

References:

Web research:

Web sites

resource:

The Economics 2: The World Economy: Higher National Diploma. Scottish

Qualifications Authority

United Kingdom Balance of Payments the Pink Book 2009: Office for National Statistics

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Content Introduction----------------------------------------------------------------3 Section 1: International Trade Three gains from trading internationally---------------------------------------3 Free Trade--------------------------------------------------------------------------3 Absolute and Comparative Advantage-----------------------------------------3 Protectionism----------------------------------------------------------------------4 Barriers to trade-------------------------------------------------------------------4 WTO and EU----------------------------------------------------------------------5 Section 2: International Finance Balance of Payments and General trends in UK Trade----------------------6

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西方经济学课程学习报 告 Document serial number【UU89WT-UU98YT-UU8CB-UUUT-UUT108】

西方经济学课程学习报告 西方经济学是经济类专业的一门专业基础课,作为新疆财经大学的学生,在财经背景的这个大环境下,学习好这门课程对我在经济学类方面的认识很有帮助。因此学好它很有必要,既能开阔我的知识范围,又能带给我一些新的思考问题方式。但是,我刚接触这门课时,认为它是比较难的一门学科,刚开始不知道这门课到底是讲什么的,但是通过老师的系统讲解我了认识了西方经济学与马克思的剩余价值以及西方经济学的诸多方面。 现就我认识的西方经济学谈以下及方面。我们通常所说的西方经济学是指流行于西方发达资本主义国家的主流经济学,是这些国家的经济学者关于市场经济中商品和劳务的生产、分配、交换、消费以及这些经济过程的相互联系的理论,也是有关市场经济运行和国家调节的经验和政策主张。 课程主要介绍消费者行为理论、生产者行为理论、成本理论、市场理论、国民收入核算理论、短期国民收入决定理论、经济增长与经济周期理论等等,所以我认为西方经济学是理论性很强的一门课程。同时,西方经济学研究的是资本主义制度下如何解决资源配置与资源利用的问题。具体可以说,它研究的是市场机制条件下经济运行状态及政府、厂商和消费者的经济行为,并提出一些治理微观经济问题和宏观经济问题的政策。因此, 我认为西方经济学对于我以后的实际生活实践也有很强的指导作用。比如,郭老师在谈到供求理论中的弹性理论中对谷贱伤农的分析和对政府保护农民利益提出了理论指导。增强了我对具体问题的认识

和一些实际操作时应注意的事项。在成本理论中关于规模经济与规模不经济的分析对于企业的生产决策具有重要指导作用;在宏观经济学的短期国民收入决定理论中关于经济萧条状况下的需求管理政策对于许多国家的现实经济运行有很强的指导作用,等等。因此,西方经济学是理论与实践的统一。西方经济学对经济现象经济运作形式的研究,特别是对市场经济的具体运作做了多方面的研究,取得了一定的研究成果,西方经济学的研究成果是具有借鉴意义的,并会对我国经济学的发展起到推动作用不仅可以有选择的吸收,借鉴,运用西方经济学的理论,还可以借鉴西方经济学的研究方式和方法借鉴西方经济学多学科发展的研究方式,可以开阔视野,扩大研究领域,借鉴西方经济学的实证分析法数量分析法等研究方法,可以使经济学研究更加科学,精准和有说服力。 总体来说西方经济学理论的研究对象随着社会经济的发展不断发展变化,并取得了一定的成绩。但无论西方经济学理论研究对象如何变化,研究对象的载体和主体都是商品,始终没有超越资本主义经济发展的局限性,即资本寻求市场,持续扩张的资本与世界有限的市场存在矛盾和不易解决的问题。这样就超越了西方经济学中无限扩张的资本与世界有限的市场之间的矛盾,商品生产的目的不是资本寻求市场而是为了满足经济行为主体人的需求。 学习西方经济学的感想。首先我们应该树立正确的态度。即使这门课是一门理论课,我们应该有能力把它学好。虽然是一门考查课但是我们不能对此放松自己,应该主动参与到老师的讲课教学中去,这样的学习主观意识是很有必要的。对于西方经济学的学习,不仅是规范学生学

世界经济学(国际经济学)期末考试复习必备

第一章世界经济的形成与发展 (一)世界经济{1.国际分工//2.世界市场} (1).国际分工 1.自然条件:人类进行经济活动的基础 2.社会经济条件:特别是生产力的发展,为国际分工的基础} . 1.生产力遭极大破坏,世界工业生产全面下跌。 一战对世界经济的影响 2.全球贸易严重萎缩,国际金本位制度瓦解。 3.主要资本主义国家在经济实力上发生显著变化。 1.引起了国际政治经济关系的深刻变化。改变了 苏联社会主义制度 19世纪末20世纪初的资本主义世界经济体系。 的建立对世界经济的影响 2.促进世界经济的发展。 1.激化了资本主义社会的各种矛盾 1929-1933年经济大危机 对世界经济的冲击 2.美英法等国家加强了国家干预经济, 德日意走上法西斯道路 3.国际经济秩序遭严重破坏 (三)二战后的世纪经济 发达资本主义国家的新变化 1.生产资料所有制的变化 2.劳资关系与分配制度的变化 3.社会阶层与阶层结构的变化 4.经济调节机制的变化

第二章经济全球化与世纪经济发展新阶段 (一)经济全球化:(def)通过国贸,国际金融,国际投资以及国家之间的技术人员流动, 各地经济成为高度融合的有机整体的过程。 (二)经济全球化的动因: 1.科技革命为其提供了物质基础与现实可能。 2.全球的市场化改革为其创造了体制条件 3.跨国公司的全球扩张是其载体与主要推动力量 。。。。。 (四)经化对世经的影响 1.通过贸易与投资获取现实利益 2.其占据的国际经济主导地位为其对外扩张带来广阔空间 3.加快产业结构的升级 积极 4.有助于引进人才 对发达 消极:1.加大了金融风险 2.出现产业空心化和制造业职位的流失。 积极:1.有助于充分利用国内外两种资源与市场,为实现经济现代化提供可能 2.带来了显著的贸易投资利益,使得以发挥比较优势。 对发展中 消极:1.积极主权遭威胁 2.加大金融风险3.盲目产业转移损害经济可持续 性发展。4.国家安全遭威胁。 (五)经济全球化背景下为何要加强国际合作与竞争加剧 1.经济全球化加剧了南北差距。(发达国家位于价值链高端,获取利益。发展中人才流失。) 2.经济全球化使得世纪经济发展的不确定因素增多(市场经济体制在全球范围内扩张,市场 机制具有盲目性,国贸易受市场风云变幻影响,外部冲击。)3.经化加剧了全球环境污染与生态危机。 (六)世纪经济格局的新变化:1,世经并未回到由美国称霸的单极格局。2.当前世界正在 经历大发展大变革大调整,和平发展的时代潮流。

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