Why study international trade and finance by t8929128

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									Why study international
 trade and finance?
              Recent examples
   Outsourcing (offshoring) – a new form
    of international trade
    • Reduces costs of production (labour cost)
    • Which kinds of jobs are affected?
    • Which countries are affected?
         The case of India – advantages
    • What is the extent of outsourcing?
    • Government economic policy in cases of
      outsourcing?
   International trade, working
    conditions in developing countries
    and child labour
    • Does international trade help improve
      working condition in LDCs?
    • Does international trade contribute to
      an increase in child labour?
    • Should we boycott imports from
      countries/companies that allow child
      labour
    • How can we resolve the problem?
   The European Union

    • The euro – a supranational currency
         Advantages of a common currency
         Disadvantages?
         The experience of using the euro
    • The geographic expansion of the
      European Union
         Requirements for joining the EU
         Benefits of joining the EU
         Costs?
   China’s revalues its currency
    • China’s fixed exchange rate was below
      market value, making Chinese imports
      cheaper and contributing to a trade deficit of
      the US with China
    • To maintain the fixed exchange rate the
      Chinese government bought US dollars and
      sold yuan.
    • These US $ were used to purchase US
      government bonds
    • Was the yuan overvalued?
         China has a small trade surplus overal
         Saving rates in China are very high suggesting a
          surplus
    Why is int’l economics different
   No-one is in charge of the whole
    world economy in the sense that
    governments are in charge of the
    national economy
   Each country has its own currency
    and currency values fluctuate
   Each country has its own fiscal policy
    which causes movement of capital
   The factors of production are mobile
    across countries

								
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