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International Economics and International Economic Organizations
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Lesnotities International Economics and International Economic Organizations AJ Danny Cassino + guestlectures
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Intern. Eco & Organ.Danny Cassimon
1
,10/10/2023
LES 1: Introduction
Exam
- Written in January
- 2h exam
- Two parts
- Finance
- Trade
- 3 questions about each part, you choose 2 about each par
- Each question = 5/20
→ Slides = CORE material for this course
→ Recordings from last year are online!
“Sowieso krijg je een vraag over BOP. Dus def geven en dan zal het afhangen van de
rest van de vraag. Maar sowieso: BOP = all cross-border transactions taking place
between one country and the rest of the world... enzo enzo”
2
,1. International Economics: a ‘global public goods’ approach
Market based goods
- Excludible
- You can only enjoy this product when you pay for it
- You can’t consume it when you are not prepared to pay for it
- Rivalry
- When you have it, nobody else can have it
- If I buy and drink a cola (zero), nobody else can drink it
Public goods
- Basic characteristics
- Non-exclusion
- Once it is there, you can’t force people to pay for it/exclude people
- Non-rivalry in consumption
- In practice a lot of:
- Quasi-public goods (= only have 1 of two characteristics)
- Joint products (= they have the characteristics but not fully)
- Basic problem
- Underprovision due to free riding
- To overcome/solve the problem of underprovision
- ‘Rules’, ‘institutions’
- Application to global context
- Global public goods (GPGs)
- Different technologies of provision exist → e.g.
- Summation
- Aggregate is the total sum of all the individual contribution
- Weakest link
- Explained from the perspective that individual contributions lead to
the aggregated result → The aggregated result/total result is
determined by the lowest contribution
- Best shot
- The opposite from the weakest link
3
, - Application to International Economics
- Rules on trade
- International financial stability, optimal capital provision
- Applications on institutions
- International Trade issues: the WTO
- International Finance: IMF/World Bank
- It provides a global public good
2. The Concept of the Balance of Payments
Balance of Payment (BoP)
→ Where you see the cross border transactions between states
= An accounting record (in monetary terms) of all transactions of goods,
services, income and financial assets between domestic households,
businesses and government of a given country and residents of the rest of
the world during a specific period (usually 1 year)
- BoP ‘identity’
- current account + capital (and financial) account = 0
4
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