Transcript The New Europe

Economics and Development
International Economics 2
Lecture 1
Giorgia Giovannetti
Professor of Economics, University of Firenze
[email protected]
Introduction
• The timetable
• Course presentation, slides in Moodle after the
lecture
• What about this course? lectures, students’
involvement, choice of specific topics.
• Important part of work is reading articles,
commenting data, with the objective to
understand, synthesize, discuss and judge
articles, to get insights from data and link data
and theory.
Lectures (tentative)
13/9
14/9
20/9
21/9
Introduction:globalization and separation
No class
Measuring globalization, 1
27/9
Overview trade models (Bernard et al 2007; 2011)
28/9
Exercises on indicators, data etc
The concept of Comparative advantage: the model of
Ricardo
4/10
Measuring Globalization, 2, Indicators
5/10
11/10
12/10
18/10
19/10
Ricardo and comparative advantage, 2 /H-O, intro
Trade models: H-O
Trade models: H-O,2
Exercises on Ricardo & H-O
25/10
26/10
2/11
8/11
9/11
15/11
16/11
22/11
Trade and imperfect competition, 2
Geography models/gravity
Hysteresis, Heterogeneous firms
The Melitz model
23/11
29/11
30/11
6/12
7/12
FDI and Multinationals Offshoring/trade in tasks
China and India (BRICS)
Trade and Imperfect competition, 1
Exercises on imperfect competition & Melitz model
Trade policy
Trade Policy: TTIP
FDI and Multinationals: OLI theory
Granularity and aggregate shocks
Brexit: discussion
exercices
Students
presentations
Plan of the
course/lectures
The first two weeks
• Introduction to topics and issues (today).
Data on globalization, world GDP and
trade, answers to some basic Q, China and
India (sketch)
• Data & history; introduction to statistical
indicators used to measure international
integration, specialization and
competitiveness
• Overview of trade models
Main References (first two weeks)
• FT chapter 1
• Slides GG (in Moodle)
• Further readings (if interested)
– Badwin, 2006, the great unbundling(s)
– Havik and Morrow, 2006, global trade integration and outsourcing, how well
is EU coping with these challenges
– OECD (2005)Handbook of Economic Globalisation Indicators
– Love P. and Lattimore R. (2009) International Trade: Free, fair, open?
OECD
– Bernard A. J Bradford Jensen, Redding SA & P. Schott, 2007, Firms in
International Trade, Journal of Economic Perspectives, vol 21 n.3
– Andrew B. Bernard, J. Bradford Jensen, Stephen J. Redding and Peter K.
Schott (2011) The Empirics of Firm Heterogeneity and International Trade,
CEP Discussion Paper No 1084, October
Objectives
• Provide
– a picture of historical trends
– some conceptual basis for understanding the
major international economic questions
• We deal with both theory and empirics
• For data: IMF, Worldbank, WTO, ITC,
Unctad, OECD, ILO i.e. international
Organisations
Examples of questions we address
• Are existing trade models (developed for the “North”) able
to explain trade in the “South”?
• Is globalization a new phenomenon? How do we measure
it?
• Is rising North-South trade responsible for rising
inequalities in the North?
• What are the causes and consequences of changes in terms
of trade for developing countries?
• What are the effects of quotas on textiles? Or other tariffs?
• What is the EU development policy? Has it changed in the
last 20 years? if so, how?
• Where are we in the negotiation at WTO? And TTIP?
• What is the effect of offshoring on employment?
• How does migration fit into this picture?
Info, exams, participation etc etc
• Exam: written exam (three random tests?
Or final?)
• Your role: ppt on two articles of your
choice in a list that I provide or group work
with theory and empirics?
• Participation: important….you can
volunteer to lead discussion on «hot topics»
(EU crisis, TTIP etc)
Globalization: definition
• (economists): increase in international trade of
both financial assets and goods that comes from a
decrease in transaction costs, increase of
movement of workers and ideas
• Two main point: Globalization is non an (entirely)
new phenomenon and is not irreversible
• Last 15 years (India): unbundling of the
production process: production is split and diced
into separate fragment, spread around the world
• IMPORTANT: also services and high skill jobs
• Trade of tasks rather than goods
Recap: Trade in the Global Economy
• Imports are the purchase of goods or services
from another country.
• Exports are the sale of goods or services to other
countries.
– Germany had the largest exports of goods in 2008
with the U.S. and China coming in second and third.
In 2009 China became first, Germany 2nd, US 3rd.
In 2010, China first (10.4), US 2nd (8.4), Germany
3rd (8.3)
Recap: Trade in the Global Economy
• Merchandise goods: includes manufacturing,
mining, and agricultural products.
• Service exports: includes business services like
eBay, travel, insurance, and transportation.
– In combining all goods and services, the U.S. is the
world’s largest exporter followed by Germany and
China.
Last ten years: world trade and
GDP
GDP
TRADE
2012 and 2013 well below 10
years average
13
Annual Growth of Merchandise Exports
Recap: Trade in the Global Economy
• Migration is the flow of people across
borders as they move from one country to
another.
• Foreign Direct Investment is the flow of
capital across borders when a firm owns a
company in another country (above 10%, a
priori threshold).
Population
Population in
millions, 2011
EU-27 Population Pyramid,
2008, 2060
16
Foreign Direct Investments