ECOP1003 International Economy and Finance 代写



ECOP1003
International Economy and Finance

Semester 2 – 2017
Lecture 2.2 - Winners and losers from trade
Lecture outline
Key terms
Concepts & contexts
NAFTA: North American Free Trade Agreement
https://www.youtube.com/watch?v=mSXmB_my0ls

The Stolper-Samuelson theorem
Stopler-Samuelson
Theory of who benefits and loses from free trade
Ricardo on Corn Laws 
S-S theorem: Free trade benefits owners of factors that a relatively well endowed, and harms owners that are relatively poorly endowed.
Allows us to map potential political alliances
US and Mexican manufacturing workers
US and Mexican farmers
Other political contestation over free trade:
NGOs and civil society
Questions over democracy

ECOP1003 International Economy and Finance 代写
WTO meeting in Seattle 1999
Investor-state dispute settlement in TPP

Winners and losers within countries




Some criticisms of theory of comparative advantage
Realism of assumptions
Unequal exchange (two weeks time)
History of trade (next week)

Are factor endowments simply given?
Are markets perfectly competitive?
Is there full employment?
Do countries trade according to comparative advantage?
Leontief in 1953: The US, while being capital rich, had more capital intensive imports than exports.

Up to 40 per cent of trade is within corporations (intra-firm), which is more along the lines of planning rather than market exchange.

Large corporations have a considerable degree of monopoly or monopsony power.

Liberals may counter evidence that doesn’t conform to theory as being a result of institutional and policy failures.
Do all countries actually gain from trade?

Ridriguez and Rodrick (1999): “there has been a tendency in academic and policy discussions to greatly overstate the systematic evidence in favour of trade openness.”
‘Gains’ beyond increase in efficiency and total output?
Naturalising nation state as unit of analysis?
Questions of inequality and distribution
Competing frameworks for weighing up costs and benefits
Increased vulnerabilities to shocks from world market
Social usefulness and ecological sustainability of production 
Modest gains: E.g. 0.7 per cent increase in GDP by 2030 from TPP (World Bank)
Immanent Critique of liberal trade theory
Does the theory of comparative advantage make a convincing case for free trade?
Does trade increase inequality? Consider inequality both between and within countries.
Sources



Conclusions and next week
ECOP1003 International Economy and Finance 代写