Transcript Global Overview - Faculty Websites

ECO 358
International Economics
Professor Malamud
 BEH 502
 895 – 3294
Fax: 895 – 1354
 Email: [email protected]
 Website:
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http://www.unlv.edu/faculty/bmalamud
or go to unlv homepage and follow
links college / department /
economics / faculty / malamud
Course objectives
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Familiarize you with the world
economy and with economic issues
encountered by international
businesses.
why nations trade with each other
 gains from trade
 the effects of barriers to trade
 the advantages and disadvantages of
fixed and flexible exchange rates.
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Elements of international
interdependence
 Trade: goods, services, raw materials,
energy
 Finance: foreign debt, foreign
investment, exchange rates
 Business: multinational corporations,
global production
 Migration: flows of skilled workers,
unskilled workers, family members
Exports of goods and services
(percent of gdp, 1997 and 2001)
Country
Netherlands
Norway
Canada
Mexico
South Korea
United Kingdom
Germany
France
United States
Japan
Exports, % of GDP
1997
2001
55%
41
39
31
31
29
25
25
12
10
68%
48
45
28
46
28
35
29
11
11
Leading trading partners of the
United States, 2000
Country
Canada
Mexico
Japan
Germany
France
Italy
United Kingdom
South Korea
China (incl. Hong Kong)
Value of US
exports ($ bill.)
$202
125
98
45
31
16
38
23
26
Value of US
imports ($ bill.)
$250
148
165
74
41
31
39
31
91
Competitiveness & trade
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Objective: generate high and rising
standard of living
For Free – Trade
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No nation can efficiently make everything
itself
Trade allows nations to focus on what they
make best
Inefficient sectors are squeezed out
Sectors open to competition become more
efficient and productive
Globalization and poetry
All are but parts of one stupendous whole,
Whose body Nature is, and God the soul…
Look round our World; behold the chain of Love
Combining all below and all above.
See plastic Nature working to this end,
The single atoms each to other tend …
Nothing is foreign; Parts relate to whole;
One all-extending all-preserving Soul
Connects each being, greatest with the least;
Made Beast in aid of Man, and Man of Beast;
All serv’d, all serving! Nothing stands alone;
The chain holds on, and where it ends, unknown.
Alexander Pope, Essay on Man, 1734
Globalization and Empire
We are living at a period of most wondrous
transition which tends rapidly to accomplish that
great end to which all history points – the
realization of the unity of mankind …The
distances which separated the different nations
and parts of the globe are rapidly vanishing before
the achievements of modern invention, and we
can traverse them with incredible ease … Thought
is communicated with the rapidity, and even by
the power, of lightning …The products of all
quarters of the globe are placed at our disposal,
and we have only to choose which is the best and
cheapest for our purposes, and the powers of
production are entrusted to the stimulus of
competition and capitalism.
Prince Albert, 1851
Globalization … and Peace
What an extraordinary episode in the economic
progress of man that age was which came to an end in
August 1914! … Escape was possible, for any man of
capacity, into the middle and upper classes, for whom
life offered conveniences, comforts and amenities
beyond the compass of the richest and most powerful
monarchs of other ages. The inhabitant of London
could order by telephone, sipping his morning tea in
bed, the various products of the whole earth; … he
could at the same moment adventure his wealth in the
natural resources and new enterprises of any quarter of
the world, and share in their prospective fruits and
advantages;or he could decide to couple his fortune
with the good faith of the townspeople of any
substantial municipality in any continent … etc., etc.
John Maynard Keynes, Economic
Consequences of the Peace, 1920.
Jihad vs McWorld
McWorld … as seen by its detractors
The City … Babylon
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Commerce
Mixed populations
Artistic freedom
Sexual license
Wealth
Arrogance
Power
The Bourgeois
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Materialism
Liberalism
Personal safety
Reason
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Empirical inquiry
Mechanical efficiency
Secular law
Humanism
Feminism
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Emancipation
Equality
Decadence
See Ian Buruma & Avishai
Margalit, Occidentalism,”
New York Review of
Books, January 17, 2002
After the Empire
Emmanuel Todd
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Massive US Trade Deficit
Loss of competitiveness?
 High – tech / New economy ?
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Capital Inflows
Confidence?
 Dependency?
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