This paper presents an endogenous growth model of an open economy in which the growth rate of income is higher if foreign capital goods are used relatively more than domestic capital goods for the production of capital stock. Empirical results, using cross country data for the period 1960-85, confirm that the ratio of imported to domestically produced capital goods in the composition of investment has a significant positive effect on per capita income growth rates across countries, in particular, in developing countries. Hence, the composition of investment in addition to the volume of total capital accumulation is highlighted as an important determinant of economic growth.
Over the past three decades, the price of machinery and equipment fell dramatically relative to other prices in advanced and emerging market and developing economies. Using cross-country and sectoral data, we show that the decline in the relative price of tangible tradable capital goods provided a significant impetus to the capital deepening that took place during the same time period. The broad-based decline in the relative price of machinery and equipment, in turn, was driven by the faster productivity growth in the capital goods producing sectors relative to the rest of the economy, and deeper trade integration, which induced domestic producers to lower prices and increase their efficiency. Our findings suggest an additional channel through which rising trade tensions and sluggish productivity could threaten real investment growth going forward.
What is International Trade International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. How you will benefit (I) Insights, and validations about the following topics: Chapter 1: International trade Chapter 2: Economy of Burkina Faso Chapter 3: Economy of Canada Chapter 4: Economy of the Dominican Republic Chapter 5: Economy of Ethiopia Chapter 6: Economy of Jamaica Chapter 7: Economy of Malawi Chapter 8: Economy of Mongolia Chapter 9: Economy of Nigeria Chapter 10: Economy of Rwanda Chapter 11: Economy of Uzbekistan Chapter 12: Tariff Chapter 13: Economy of Mozambique Chapter 14: Import substitution industrialization Chapter 15: Subsidy Chapter 16: Virtual water Chapter 17: Export Chapter 18: Non-tariff barriers to trade Chapter 19: International business Chapter 20: Economy of the Western Cape Chapter 21: Economic history of Ghana (II) Answering the public top questions about international trade. (III) Real world examples for the usage of international trade in many fields. Who this book is for Professionals, undergraduate and graduate students, enthusiasts, hobbyists, and those who want to go beyond basic knowledge or information for any kind of international trade.
Seminar paper from the year 2006 in the subject Business economics - Miscellaneous, University of Hamburg, language: English, abstract: If the need for a „Big Push“ survives in an economy that is open to international trade and capital movements, or if openness to trade and capital movements is sufficient to overcome all poverty traps, these questions have daunted development economics since its inception (Jaime et al. 1997). In the last two hundred years, every country with high development and productivity rates has industrialised. While in the eighteens century Britain, and in the twenties century Korea and Japan grew rich, other countries remained poor. One of the discussed causes for this underdevelopment might be the small domestic market. While the idea started with Rosenstein-Rodan (1943)1, who thought the solution would be aid and investment programs, since the 1960s advocates tend to the Idea that openness of the economy resolve the problem of a small domestic market. The theory is that openness would induce an export-led „Big Push“ in terms of simultaneous growth over different sectors (Murphy et al.1989, p.1003). In the current discussion the „Big Push“ induced by aid has its comeback in the Millennium Development Goals from the UN (Easterly 2005, p.3). The focus of this paper is on the East Asian countries, where the export-promotion-policy had had an important role. But Trindade (2005, p.41) was the first author who interpreted the coordination-problem as solvable with solely export-promotion, because of the naturally coordination effect of exports (Asche, 2005, p.24 gloss 28). So the question is not if exports are good for an economy, but if exports can induce a „Big Push“ and thus making aid superfluously.
Revised and updated for the 2nd edition, this textbook guides the reader towards various aspects of growth and international trade in a Diamond-type overlapping generations framework. Using the same model type throughout the book, timely topics such as growth with bubbles, robots and involuntary unemployment, financial integration and house price dynamics, policies to mitigate climate change and the persistence of religion in a globalized market economy are explored. The first part starts from the “old” growth theory and bridges to the “new” growth theory (including R&D and human capital approaches). The second part presents an intertemporal equilibrium theory of inter- and intra-sectoral trade, investigates innovation, growth and trade and limits to public debt as well as nationally and internationally optimal climate policies. The debt dynamics of the Euro Zone and the origins of intra-EMU and Asian-US trade imbalances are also explored. The book is primarily addressed to upper undergraduate and graduate students wishing to proceed to the analytically more demanding journal literature.
When this work was first published in 1966, there was much interest in various types of commodity agreements and compensatory financing as methods of reducing the effects of export fluctuations on the economies of developing countries. The book concluded that short term fluctuations in export earnings, though perhaps important for some countries, did not appear to be the general problem that had been assumed. If correct, it would suggest that any measures should be carefully designed to fit the situations of countries that were affected and be subjected to cost-benefit analysis. This led to many published and unpublished studies on the issues: some supported, others contradicted the book’s conclusions. The data available now are vastly greater and probably more accurate than pre-1966. However, the work and the issues it raised remain important because most schemes proposed to reduce export instability would be costly and likely to divert resources from uses more obviously aimed at raising economic development in most developing countries.
Nowhere has the divide between advocates and critics of globalization been more striking than in debates over free trade and the environment. And yet the literature on the subject is high on rhetoric and low on results. This book is the first to systematically investigate the subject using both economic theory and empirical analysis. Brian Copeland and Scott Taylor establish a powerful theoretical framework for examining the impact of international trade on local pollution levels, and use it to offer a uniquely integrated treatment of the links between economic growth, liberalized trade, and the environment. The results will surprise many. The authors set out the two leading theories linking international trade to environmental outcomes, develop the empirical implications, and examine their validity using data on measured sulfur dioxide concentrations from over 100 cities worldwide during the period from 1971 to 1986. The empirical results are provocative. For an average country in the sample, free trade is good for the environment. There is little evidence that developing countries will specialize in pollution-intensive products with further trade. In fact, the results suggest just the opposite: free trade will shift pollution-intensive goods production from poor countries with lax regulation to rich countries with tight regulation, thereby lowering world pollution. The results also suggest that pollution declines amid economic growth fueled by economy-wide technological progress but rises when growth is fueled by capital accumulation alone. Lucidly argued and authoritatively written, this book will provide students and researchers of international trade and environmental economics a more reliable way of thinking about this contentious issue, and the methodological tools with which to do so.
'International Trade, Capital Flows and Economic Development in East Asia' examines how international trade and capital flows have engineered the development process in East Asia, and explores the real and potential challenges that the region is expected to encounter in the twenty-first century.
The study of international economic systems teaches about global production and competition, exchange rates, international finance, free trade vs. protectionism and economic development.
