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Summary of 30 pages for the course Economics at HW (English and Dutch)
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Economics Major 5.2@ LauraStudie
,General Economics
Lecture 1: Introduction 2015
Program
1. The gains of trade (=De winsten van de handel)
2. Some trends in global trade (= wereldhandel)
3. Offshore considerations and Assignment (=Offshore overwegingen)
4. WIR 2014
5. Some questions
6. An extra suggestion
The gains of trade
GDP per capita in 2013 (PPP, $)
Korea, North 1,800 x18.4
Korea, South 33,200
World output is higher if every country produces and trades the good in which it has a
comparative advantage (=comparatief voordeel).
A nation's comparative advantage occurs (=optreedt) when it focuses on producing the good
in which the opportunity cost of production is lowest.
Assume (=aannemen):
o Cost of cars 50% of the cost of cars in EU
o Cost of computers 33% of the cost of computers in EU
China will specialize in computers and the EU in cars
o Prices do not stand alone but are ratios!
International specialization: productivity gains (= winsten).
International competition: lowers pricing power, creates more choice and stimulates
innovation.
Internationalisation of sales (by exports): economies of scale.
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, Globalisation breeds globalization (=Globalisering kweekt globalisering)
Some trends in global trade
In the last few decades, global trade growth raced ahead of GDP growth, supporting the
latter and increasing interdependence. (=In de afgelopen decennia, groei van de
wereldhandel reed vooruit op de groei van het BBP, het ondersteunen van de laatste en de
toenemende onderlinge afhankelijkheid)
o Trade volumes grew about 3 percent in 2012 and 2013, substantially lower than the
pre-crisis average of 7.1 percent (1987 to 2007)
Less rapid expansion of global value chains
Slower pace of trade liberalization
Reshoring
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