约克大学summer math 宏观经济 lecture 8.pptx

Macroeconomics Lecture 8: The open economy – trade and finance 2 International Trade and Finance: Some Key Issues The Balance of Payments Consists of the current account and the capital account. A deficit on the former must be compensated for via a surplus on the latter. A deficit on both is unsustainable 3 The Neo-classical Theory of International Trade The principle of comparative advantage (David Ricardo – early 19th century) The modern interpretation of an old idea: Relative factor endowments and international specialisation: the Neoclassical model 4 Figure 12.1 5 The Traditional Theory of International Trade The principle of comparative advantage Relative factor endowments and international specialization: the Neoclassical model Suggests gains from trade and an increase in world output And that international wages and other factor costs will equalise 6 The Traditional Theory of International Trade Trade theory and development: the traditional arguments Trade is good for growth according to the traditional models Trade tends to promote international and domestic equality Trade ensures that resources get used efficiently For trade to work markets must be competitive Outward-looking policy therefore to be preferred 7 Trade policy Free-trade versus protectionism Outward versus inward-looking policy export promotion versus import substitution Debate is related to, but not identical to the debate concerning free-markets versus government intervention 8 Trade Policy Export promotion: looking outward and seeing trade barriers 1. Primary-commodity export expansion Issues and problems Low Income elasticity, relative prices and the terms of trade Low Price elasticity – so lower prices imply lower revenue Increased competition and the failure of international commodity agreements Technological substitution of primary products (e.g. synthetic substitutes Substantial Protectionism from developed economies – even in the form of ‘aid’ 9 Trade Policy Export promot