The Growth Of International Economy - 1461 Words

The growth of international economy is significantly being driven by trade liberalization. The concept of free trade was firstly presented by Francisco de Vitoria in 16th century (Nussbaum, 1947). Then two early economists Adam Smith and David Ricardo proposed the concept of liberalization trade and applied the theory to practice. Since the end of World War II, the United Sates devoted itself into reducing tariff-barriers and free trade. As a result, the United States led the establishment of the General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) (World Trade Organization, 1997). FTAs as a tool of trade liberalization can effectively utilize resource allocation, stimulate competition and increase capital†¦show more content†¦For dynamic panel data model, it is used to eliminate deviation which leads to the inaccurate result of the research (Anderson Cheng, 1982). In addition, several factors are considered in the models, including the time effect, distance between units, common language, common land boarders, trade policy, the level of domestic product and trade policies (Lira, Lee and Lee, 2012). According to the results of the research, Lira, Lee and Lee (2012) concluded that there is less insignificant difference in benefits of participating in FTAs between rich and poor countries and signatory members can benefit significantly from joining FTAs, increase of trade flows from 200% to 220% using the most reliable estimation techniques. It can be clearly seen that FTAs guarantee the economical fairness among the members, while the members benefit economic interest. However, critics asserted that FTAs cannot maintain fairness among members because of the trade asymmetry. For instance, through establishing the dynamic panel data model and analyzing the Europe Agreement (EA), Caporale, et al. (2012) believed that FTA causes an increase in trade deficits for member and trade asymmetry because of the existence of economic and technological gaps between members. According to the statistics, it can be seen that FTAs of Central and Eastern European countries (CEEC-4) deteriorated the trade balance by over 0.12% of GDP (Caporale, et al., 2012). In other words, as the difference of economicShow MoreRelatedThe Country Of Mexico, Economy, Economic Growth, And International Balances2080 Words   |  9 Pagespossible causes and how it has affects Mexico’s GDP (gross national product), pricing structure, job market, economic growth, and international balances. Lastly, I will give my suggestions about some possible solutions to how Mexico can correct the challenges that have occurred and are occurring within their economy. Keywords: Mexico, history, economy, trade, GDP â€Æ' U.S. Economy Trade Introduction In my macroeconomics class we were given a project to pick a country within a certain continent givenRead MoreComparing The Economic Profiles Of Brazil And France1677 Words   |  7 PagesComparisons: Labour Productivity Page 7 Conclusion Page 8 References Summary France and Brazil have shown to have different economies, but are both significant contributors in the global economy. The two countries are active and of importance to international trade, and although France has more access to the European Markets, Brazil has an opportunity in the international markets. The opportunity comes because Brazil has high interest rates, which investors will probably find attractive. There areRead MoreEconomic Growth Of Post War Japan1361 Words   |  6 Pagesleft over in Japan, Japan was able to rebuilding its infrastructure and reconstruct their economy. It is revealed that the Japanese economy was on its way to recovery, which received a rapid development since the war, and the reconstruction of Japan had spent less than forty years to become the world’s second largest economy in the 1980s. This essay will explore the three factors account for the economic growth of post-war Japan: the financial assistance from the United States, the external e nvironmentRead MoreThe Economic Growth Of The Swiss Economy1747 Words   |  7 PagesThe Swiss economy picked its momentum in 2013, when it began to benefit from the monetary and fiscal policies adopted by the government in 2011 and 2012 (Leal 307). In 2013, inflation was still a problem in the country and the country went through the year without any international exchange market intervention, but its currency remained stable as the Swiss National Bank had imposed to curb deflationary pressure (Leal 307). During the year, the country, managed to contain mortgage imbalances, whichRead MoreUnderstanding The Financial Market And Globalization1529 Words   |  7 Pagesin India Prepared By Dionne Benard FIN4604005_2014f_81778 International Finance Fall 2014 Understanding the Financial Market and Globalization in India Abstract The research paper is a brief study that explains the different factors that play a key role in growth international financial market in India. We also took a brief look at what the RBI (Reserve Bank of India) and their role in the growth of India’s economy. The study does not talk about the risks of investing in IndiaRead MoreThe Impact Of Technological And Commercial Effects On Economic Growth1642 Words   |  7 Pagesresources and nations differ in their preferences, capacity for growth and development, scale of production and technology. This creates the basis for (international) trade which enables exchange and consumption of goods and services which they cannot produce, thereby enjoying variety of goods and services to improve the standard of living of their people. Some of the positive effects International trade (IT) have on economic growth (EG) were pointed out by Smith (1776) and this idea triumphed untilRead MoreThe Micro Economy Of Australia922 Words   |  4 Pagesg. coffee industry). The Micro economy of Australia is one of the largest mixed market economies in the world, with a GDP of US$1.525 trillion as of 2014.Australia s total wealth is 6.4 trillion dollars. In 2012, it was the 12th largest national economy by nominal GDP about 1.7% of the world economy. Australia is the 19th-largest importer and 19th-largest exporter. The Reserve Bank of Australia publishes forecasts of the economy quarterly. The Australian economy is dominated by its service sectorRead MoreGrowing and Emergin Economies: South Korea1116 Words   |  4 Pagesand emerging economy offers multinational companies the option of conducting business globally. Rapid growth and transformation of the South Korean economy has enabled the country to become a leader in the global market. Multinational companies that are looking for new global markets should pay attention to the South Korean economy. Strong markets exist for many industries within South Korea. The emerging electronics and motor vehicle market in South Korea has pushed its economy into one of theRead MoreThe Economic Growth Of The Global Economy Essay1488 Words   |  6 PagesMinisters and the Governors of the Central Bank gathered for their annual global finance convocation. Due to stagnation and inadequate economic growth the mood was somber. The group did not see any options for bettering the stagnation and structural changes in the global econ omy. The International Monetary Fund has forecasted downward and feels the global economy is entering unexplored dangerous territory. Central Banks fear they will not be able to keep up with the possible recession. Lawrence SummersRead MoreThe Impact Of International Trade On The Development Process Of A Developing Economy1469 Words   |  6 PagesThe importance of international trade in the world has been widely studied and also examines the role of international trade in the various issues. Mainly my paper focused on the relationship between Economic Development and international trade, disadvantages of international trade also discussed. International trade is an activity of strategies importance in the development process of a developing economy. International specialization means that different countries of the world specialize in producing