Bài giảng International Economics - Chapter 1: International Economics and the Global Economy

International Economics and the Global Economy To most economists, the evidence is impressively persuasive that the dramatic increase in world competition–a consequence of broadening trade flows–has fostered markedly higher standards of living for almost all countries that have participated in cross-border trade. (Alan Greenspan)The Goals of This ChapterExplain why economists use modelsDefine globalizationDescribe the current level of globalizationEncourage curiosity about why globalization occursEncourage students to think about the future course of globalizationIntroduce the remainder of the bookThe Three Components of GlobalizationInternational trade International investmentInternational migrationWhat Is an Economic Model?Simplified representation of realityLogical representation of economic activityFocuses on relationships that are important for a particular issueOmits details deemed less relevant to the issue at handModels are sometimes referred to as theories or paradigmsTypes of ModelsThe textbook will use four categories of models General equilibrium models Partial equilibrium models Static models Dynamic modelsThese four categories are not mutually exclusiveGeneral and partial equilibrium models can be static or dynamicThe Analytical Approach of the TextbookExamine globalization’s partial and general equilibrium effectsExamine globalization’s domestic and foreign effectsExamine globalization’s static and the dynamic effectsThe Extent of GlobalizationFewer than 2 out of 100 people immigrate during their lifetimesThe Extent of GlobalizationTrade is less than 20% of world GDPFigure 1.2U.S. Exports/Production: 1879 - 1997Source: U.S. Bureau of the Census How Will Globalization Evolve in the Future? The world has achieved unprecedented levels of international economic integrationThe effects of international trade, investment, and migration are easily recognizable throughout nearly all economiesIt is still not clear, however, whether people will continue to support globalization Will people support the policymakers who offer to restrict or reverse international economic integration?Previous Globalization Episodes Were ReversedThe Roman Empire split into isolated regionsChina closed its borders in 1200 after achieving world technological superiorityMost countries intentionally cut international trade and investment after World War IMany developing countries instituted protectionist trade policies during the latter half of the 20th centurySome of the Textbook’s Unique FeaturesA full chapter on the relationship between international trade and economic growthThorough analysis of international migration and immigration policyFrequent extensions to other fields such as business, political science, and historyCase studies are spread throughout the textbook to illustrate and emphasize key conclusionsFull chapters examine economic policies that address issues related to the three components of globalizationFigure 1.9Globalization: The Complete PictureEvery economic event is related to other economic activities occurring elsewhere in the domestic economyEvery economic event is linked to past economic eventsThrough expectations, every event is linked to the futureIn summary, in an open economy, every event is linked to other past, present, and future economic events in the rest of the world