World Economy
TOPIC Globalisation
References
EssayGlobalisation and Economic Growth
EssayGlobalisation and the Rural Poor
EssayIs Globalisation in Danger
PPTintroductionppt
PPTdeveloping countriesppt
PPTtransformation economiesppt
TextbookCh9 Developing countries
TextbookCh10 The Transformation countries
全球化定义
Liberalization of trade investment production and other factors
全球化成
1 The first and perhaps more profound influence is technological change
2 Multilateral trade negotiations resulted in the continuing liberalization of trade and investment
3 Globalization has also been promoted by the widespread liberalization of investment transactions and the development of international financial markets
4 Falls in transport and communications costs
全球化优点
1Productivity increases faster when countries produce goods and services in which they have a comparative advantage Living standards can increase more rapidly
2 Global competition and cheap imports keep a constraint on prices so inflation is less likely to disrupt economic growth
3 An open economy promotes technological development and innovation with fresh ideas from abroad
4 Jobs in export industries tend to pay about 15 more than jobs in importcompeting industries
5 Unfettered capital movements provide the US access to foreign investment and maintain low interest rates
全球化缺点
Globalization can make the domestic economy vulnerable to disturbances initiated overseas
1Millions of Americans have lost jobs because of imports or shifts in production abroad Most find new jobs that pay less
2 Millions of other Americans fear getting laid off especially at those firms operating in Importcompeting industries
3Workers face demands of wage concessions from their employers which often threaten to export jobs abroad if wage concessions are not agreed to
4 Besides bluecollar jobs service and whitecollar jobs are increasingly vulnerable to operations being sent overseas
5American employees can lose their competitiveness when companies build stateoftheart factories in lowwage countries making them as productive as those in the US
全球化导致分化时代？
I don＇t think soThe divergence claim is weakenedThe world income inequality peaked around 1970 has declined somewhat in the era of unprecedented globalisation since thenThis outcome has been driven primarily by the much improved growth performance of two developing countriesChina and India
全球化济增长否利？
There would be a cautious response
Firstdistance still matteredTrade flows technology flows financial flows and capital movements are all much reduced the greater is the distance between countriesMoreover distance from markets and sources of supply is highly correlated with income levels
Secondinstitutional quality also has a very strong influence on growth and levels of income particularly with respect to capital markets both as a key influence on growth performance and in terms of facilitating successful participation in globalised finance At the same time there clearly is an important role for institutional diversity in rapid catchup growth
全球化收入等减弱甚终趋？
Lucas argues that
1 While the 20th century was marked by widening international income inequality the 21st century will see this reversed
2 While capital is fully mobile internationally international income inequalities should be rapidly reduced as capital flows from rich to poor countries
3 The process of economic catchup and convergence ensues which exhibits an inverse correlation between initial income levels and subsequent growth of real income per head
Lucas model
The model is shown to exhibit rising international inequality of incomes in the 20th followed by a strong turnaround in the 21st centuryThat is to saycountries that start growing later have faster initial growth and then experience growth proportional to income gap with leader
Lucas criticize
aThe new economic geography school sees the process of development not as the steady convergence of the poor to the rich but rather as a rapid transition of a select few who are favoured by location
bThe new institutional economic history view pioneered that institutions are crucial in informing decisions to invest andor to innovate But the tradition also stresses that bad institutions are frequently persistent and can be virtually impossible to reform because of path dependency In the absence of welldefined property rightsenforceable contracts and government the neoclassical catchup process will be aborted
cGovernment also has a crucial role to play in combatting coordination failures and instability in the financial system both of which potentially undermine investment
dThe distribution of the gains from international trade deserve some attentionA limiting case would be one of immiserising growth in which increases in productive potential were more than offset by declines in export prices and loss of purchasing power over imports
全球化农业影响
Globalisation declined information and communications coststrade protectionismtariff and nontariff barriersWhile the expansion of agricultural trade has laggedreflecting the generally lower income elasticities of demand for primary goodsand its share in total world trade has been fallenIn shortagricultural liberalisation has so far made limited progress
1 Agricultural liberalisation model is not working well because it is noe being appliedie because of extensive continued protectionism within OECD
2 Similarlywithin many developing countries liberalisation remains partialindustrial protectionism and other other antiagricultural biases persistand market outcomes often differ markedly from the theoretical ideal
3 Any residual tendency for the forces of globalisation to favour developing country labourintensive agriculture tends to be offset by biases in technological progress in favour of temperate crops and capital and skillintensity
全球化贫困影响
Globalisation is liable to change the welfare of the rurul poor by influencing the efficiency of resource usethe pace of economic growthand the distribution of incomethrough their impact on technologieson the security of livelihoodson policies and on the provision of public goods
Ways of affecting the welfare of rural poor
static effciency effectsdynamic growth effectstechnological progressdistributional effectsinsecurity effectspolicy effects
GOODsThere is a huge potential benefitfor examplefrom an acceleration of growth following from fuller integration into a rapidly expanding market for exportsThere are benefits to be had from more productive resource usesfrom improved access to technological advances and from policy improvements induced by exogenous pressures
BADsAgainst thesethere are very real dangers that the rural poor will be left behindthat they will not have access to the knowledge and other assets necessary for success in an increasingly competitive worldthat food security may be reducedthat continuing political and policy biases will diminish their prospects of sharing in the potential benefitsand that globalisation will be associated with widening income disparties
There are some determinants of outcomes
exogenous factorsmarket accessmarket failuresthe assets of the rural poor
A variety of factors prevent the rural poor from responding as well as they might to market opportunities and heightened competitionthe forces limiting their market access(poor informationweak institutionspoor infrastructureetc) and their inadequate command over assets that would raise their market effectivenessnotably educationlandwater and finance
A tendency towards intensifying inequalities of income and wealthas well as heighted instability and uncertainlyprevent general economic progress from being translated fully into improvements in the wellbeing of the poor
全球化威胁
Ideas
Interests
Institutional Relations
Instability
国际金融危机原
Big problems in international financial systemfrom dollar shortage to dollar glut
Reasons for US chronic international deficit
too much inflation at home
overgenerosity in the aid and military programs
lack of trust in the dollar
the rapid growth of productivity abroad
high investment abroad by American firms
quadrupled price of OPEC oil
全球化区域体化关系
1 Regional integration and globalisation are staggered to promote each other Regional integration is part of globalisation globalisation is the development direction of regional integration
2 Globalisation has a broader scope than regional integration and regional integration has a higher level than the globalisation
3 The strengthening of regional integration will improve the position and enhance the force of the members in the process of globalisation
4 Regional integration and globalisation are both the means of transnational optimal allocation As a result of the regional blocs have similar geographypoliticsincomedevelopment level and economic advantagesthey are more easy to achieve the free movement of factors of productionaccordingly paving the way for globalisation
发达国家二战格局发展历程
Stage 1 recovery of world economy (19451952)
Characteristicsincreasing GNP growth for main market economy countries
Stage 2 highspeed growth of world economy (19531973)
Characteristicshighspeed growth
Reasons third scientific and technological revolutionadjustment of production relations
Stage 3 stagflation (19731982)
Characteristicslower GDP growth rate and higher CPI
Reasonsdeficit finance debt increase monetary supply increase increasing petroleum price surplus production capability international facors
Stage 4 economic readjustment and reform period (1983)
Characteristicsreduce government expenditurelower tax ratereduce monetary supplyenterprise privately ownedindustrial structure readjustment
发展中国家定义
Underdeveloped economically in the transition from traditional economy to modernezed economyIn a broader sense the rest of the nations and regions except developed countries
发展中国家特征
1 Undeveloped productivity
agriculture
industry
science &technology
2 Dualist structure
3 Imperfect market system and mechanism
4 National capitalism
5 Dependence on DCs
发展中国家发达原
1 Excessive population growth
2 Missing institutions
3 Lack of capital formation
4 No entrepreneurship
5 National debt
6 Vicious circle
7 Different endowment conditions
发展中国家发展策略
1 Import substitute(inward)
DefinitionThis policy was directed at replacing imports by domestic goods
Measures
Protectionist instrumentsimport duties &import licenses
Control on foreign exchange
Revalue domestic currency
Preferential policies for new industries
Performance
Faster development of national industries
Lack of scale of economies difficult to access international market
Less export of agricultural products decreasing exchange foreign income
Increased demands for imported equipments technology & parts imbalanced payment of account
Countries and outcomes
Latin Americafailed
2 Export diversification(outward)
DefinitionThis policy was to expose to export sectors to international competition and diversify exports
Measures
Loosen trade restriction
Laborintensive products to capitalintensive & technologyintensive products
Flexible trading system with government and nongovernment organizations involved
Found export processing areas
Performance
Increase interest rate
Improve the quality of education
Governmentguided management system
Combination of economic growth &reasonable distribution of income
Countries and outcomes
Asiasucceeded
转型国家定义
Countries gave up central planning and switched over to a market economy approach
转型国家特征
1 Institutional framework
Law of contract
Law of enterprises
Property rights
Twotier banking system
2 Macroeconomic stabilization
Monetary stabilization
inflation
currency reform and convertibility
tight budget restrain
reduction of government budget deficits
3 Real adjustment of firms
Start of microreforms
Autonomy of firms
Abolition of the government export monopoly
Markets instead of central planning
Free market entry
Implementation of microreforms
Freeing of prices (on commodity and factor markets)
Free trade no subsidies for tradable goods
Commercialization of firms
Privatization of enterprises
New enterprises
转型国家济发展J曲线效应
The transformation of a centrally planned economy involves a collapse of national output
Reasons
1 A crucial reason for this breakdown is that the capital stock of the transformation country that was obsolete
Thereforethe reform countries have to rebuild their capital stock
But it istimecostinginvolving adjustment costsexisting human capital integrated
2 institutional vacuum at the beginning
转型国家济政策
1 Privitization
mainly coupon privitization
2 The tightening of the budget restraint
transformation countries are often characterized by high budget deficits
3 Current account deficits
4 Inflation
TOPIC International Institutions
References
PPTinternational institutionsppt
PPTWTO &international trade policyppt
TextbookCh14 International Institutions
TextbookCh5 International trade policy
IMF目标
1 Convertibility
The IMF determined the circumstances in which countries made their national currencies convertible with other currencies
2 The exchange rate regime
The IMF decided on the ways in which currency values were to be correctedand the choice to be made between fixed and flexible exchange rates
3 Balance of payments adjustment
The IMF resolved how balance of payments surpluses and deficits were to be accommodated between countries
4 Reserve assets (first SDRs)
The IMF held reserves from which debtor countries could borrow in limited quantitiesIn 1970 the first special drawing rights(SDRs) were allocated to memebersand IMF is a large holder of gold reserves
5 International management
The IMF provided machinery for consultation and collaboration on international monetary problems
改革IMF角色
1 Still had a role to play in relation to convertibility exchange rates & balance of payments adjustment
2 Responsibility of ensuring that
not engage in destabilising speculation over exchange rates
not attempt to influence artificially the value of exchange rates in order to gain a trading advantage
斯蒂格利茨IMF改革提案
To disclose the poverty and unemployment impact of its conditionality requirement
To pay more attention to improving safety nets in vulnerable countries
To deal with financial crisis is through bankruptcynot through IMFfinanced bailout of creditors
Responses to financial crisis in developing and transition economies need to be placed within the social and political context
华盛顿识容
The emphasis is on marketfriendly’ economic reform
For the IMF the most important aspects of reform are still geared to stabilizationie
Fiscal and monetary austerity
Exchange rate liberalisation
Relaxation of controls on trade
Relaxation of controls on capital movements
WB目标
1 Changed substantially since its founding to finance postwar reconstruction in continental Europegranting loans to developing countries
2 It borrows on world markets and lends to needy countries for development purposes
WBIMF理区
Theoretical difference of the IMF & WB
WBthe institution which provides longterm development finance for developing and transition economies at relatively low rates of interest
IMFthe institution which provides developing and transitional countries with shortterm finance to tide over balance of payments problems
WB发展框架
Require partnership
Localization
Urbanization
Development challenges principally poverty hunger illhealth lack of housing & illiteracy
GATT目标
Its objective was to prevent a return to the protectionist measures which had so damaged world trade during the 1930s
乌拉圭回合条款
Main provisions in Uruguay Round
The multifibre arrangement (MFA)to be phased out
Agriculture to be brought within the provisions of GATT
rules to cover intellectual property rights(IPRs)
for the 1st time to cover services
voluntary export restraints(VERs) to be phase out
WTO成立
The final act of the Uruguay Round established a formal organisation called the WTO to replace GATTThis is generally considered to be the most important achievement of the Uruguay Round
WTOGATT区
WTO framework is superior to GATT
a single undertaking with a unified legal basis( cf merely a series of multilateral trading agreements)
clear surveillance mechanisms to oversee trade policy
provisions for the WTO to consult with the IMF and the World Bank
all countries within WTO agree to abide by the rules(cf ＇provisional accession protocols＇)
WTO贸易集团歧视法
Ways in which trade blocs can be made as nondiscriminatory as possible
required to cut their tariffs against outsiders to the lowest level of any member of the trade bloc
obliged to notify the WTO well in advance
the WTO should monitor existing trade blocs very closely
WTO惠国原
WTO＇s MFN principletrade barriers should be lowered equally and without discrimination for all foreign trading partners
It has two deviations
special treatment for developing countries
permitting trade blocs involving industrialized countriesif the trade blocs removes tariffs and other trade restrictions on most of the trade among its membersand if its trade barriers against nonmembers do not increase on average
TOPIC Regional Integration
References
EssayEcnomic Survey of Western Europe
EssayEuropean Monetary Union
PPTRegional integration in the world economyppt
PPTHistory of Regional Economic Integrationppt
PPTCharacteristics of RTAsppt
PPTRTAs in the Atlanticppt
PPT(European) Economic integrationppt
PPTEU single currencyppt
PPTAPECppt
TextbookCh11 Regional integration in the world economy
TextbookCh11 Trade Blocs and Trade Blocks
区域体化五种形式特点
1 Preferential trade agreement (PTAs)
least strict form
for certain goods among the members (sometimes even unilaterally)
neither general reduction of internal tariffs nor a common external tariff within PTAs
one way (by DC to LDC) preferential arrangement
violates GATT article XXIV but tolerated by LDC enabling clause
2 Freetrade areas (FTAs)
abolish internal tariff but no common external tariff
elimination of tariffs and quantitative restrictions
rules of origin and strict controls of the origin of goods
3 Customs unions
abolish internal tariffs but with a common external tariff & a common trade policy toward third countries
common level of trade barriers against nonmembers
harmonize quantitative restrictions export subsidies and other trade distortions
4 Common market
deeper integration
free trade of goods services and free exchange of capital and labor
labor construction consulting
capital banking financial servicesand capital applies to both FDI and portfolio capital
5 Economic union
unify all their economic policies including monetary fiscal welfare policies & policies toward trade and factor migration
even common currency
区域体化原
economic reasons
political reasons
geographical reasons
economic profit
区域体化组织
1 Europe
EU(European Union)
EFTA(European Free Trade Association)
CEFTA(The Central European Free Trade Area)
2 The America
NAFTA
TAFTA(TransAtlantic Free Trade Area)
Andean Community
LAFTA (Latin American Free Trade Association)
CARICOM (the Caribbean Community)
FTAA(Free Trade Area of the Americas)
3 AsiaPacific
ASEAN(The Association for SouthEast Asian Nations)
AFTA (in discussion)
APEC(AsiaPacific Economic Cooperation)
ANZCERTACER (Australia New Zealand Closer Economic Relations Trade Agreementbetween Australia and New Zealand)
区域体化济贸易影响
static effects
trade creation(the net volume of new trade created by forming the trade bloc)
trade diversion(the volume of trade diverted from lowcost outside exporters to highercost blocpartner exporters)
The gains from a trade bloc are tied to trade creation and the losses are tied to trade diversion
dynamic effects
market effect
competition effect
investment inflow effect
expansion and deepening effect
区域体化集团增加贸易办法
1 Two tendencies to make for greater gains from a customs union
The lower the partner costs relative to the outsideworld costs the greater the gains Any trade diversion will be less costly
The more elastic the import demand the greater the gains The trade creation in response to any domestic price decline will be larger
2 Other possible gains from a trade bloc
creating a larger market
creating scale economies
reducing prices by increasing competition
lowering costs of production by increasing competition
firm’s lowering costs by expanding their scale of production
increasing opportunities for business investments
区域集中度影响素
Geographical proximity
Economic Size
Income level
Economic system
Distance and Adjacency
Language
Similar taste
Gravity Model
EU体化进程原
1
peace
wish to unify after WWII
fight against USA
Japan＇s economy highly developed
2
Firstlyby the ingeration of the economic policies of member statesin particular monetray and fiscal policies
Secondlyby the acceleration of market integration
Thirdlyby effectively operated as a single entity when dealing with the world＇s principal international economic institutions
EU体化进程简介
1 ECSC (European Coal and Steel Community)—France Germany Italy Luxemburg Netherland and Belgium—1952
2 EEC(European Economic Community) and Euratom (European Atomic Energy Community)—the six countries – 1958
3 EEC and Euratom are incorporated into EC(European Community) in 1967
4 EU (European Union)—Nov 1st 1993
5 Five enlargements
Great Britain Denmark and Ireland in 1973(9)
Greece in 1981(10th)
Portugal and Spain in 1986(12)
AustriaSweden and Finland in 1995(15)
PolandHungaryCzechSlovakiaSloveniaCyprusMaltaEstonia
Latvia etc(25)the most ambitious one –total population (045 billion)—similar economic scale with that of the US
6 Romania and Bulgaria are negotiating for joining EU
EU体化进程四阶段
1preparatory and experimental stage(WWI1957)
the important role France played
Robert Schuman(18861963) and Schuman Plan(1950)
Treaty on ECSC(Paris Treaty)(1951)—effective in 1952
2customs union(19581985)
Treaty on ECSC and Treaty on Euratom(Rome Treaty)(1958)
Content of Rome Treaty
Stipulation and arrangements of customs union
Achievements in the process of customs union establishmentCAP(Common Agriculture Policy)
3 common market(19861992)
Historical Background
Single European Act—SEM(Single European Market)
Schengen Agreements(BelgiumFranceGermanyLuxembourg and Netherlands in 1985)
4 Economic union (since 1992)
Treaty on European Union(Maastricht Treaty)
EU农业政策？
Why so much attention was given to CAP
food shortage during WWII
two main actors in EEC France and Germany
impacts of increasing price for agricultural products on economies
tranditional agricultural organizations
Guideline for CAP
To form single market for agricultural products
To stablize market for agricultural products
To take trade protectionism policy
EU体化进程成
Five enlargements
Maastricht Treaty
the Stability and Growth Pact(SGP)
CAP(Common Agriculture Policy)
single currency market
etc
EU体化进程出现问题
First of all there is lack of democracy TodayEU has been achieved in many areas of a supranational but the distance from ordinary people has become more and more far away
Moreoverthere is lack of consensus Facing the problems of how to improve the competitiveness of the economy strengthening social justice and globalisationInternal of EU has divergent viewsIt is difficult to reach an agreement
Finally there is lack of means many institutional reforms have laggedaffecting the capacity of the expanded EU＇s force
98年EU低出口增长原
Becasue of the instability of Asian economy which are important to EUMeanwhileEU look forward to a good future of Asian economy at the end of 20th century
欧洲单货币发展进程
1EMS
ERM(Exchange Rate Mechanism)—core of EMSmutually pegged exchange rates
ECU(European Currency Unit)
Central exchange rate
European Monetary Cooperation Fund
2From EMS to EMU
Delors Reportthreestage process for establishment of EMU
All EU members were to join the EMS exchange rate mechanism (ERM)
Exchange rate margins were to be narrowed and certain macroeconomic policy decisions placed under more centralized EU control
Replacement of national currencies by a single European currency and vesting all monetary policy decisions in a ESCB
Reasons
EU countries moved away from the EMS and toward the single shared currency for four reasons
Greater degree of European market integration
Same opportunity as Germany to participate in systemwide monetary decisions
Complete freedom of capital movements
Political stability of Europe
Convergence criteria(to join EMU)
Price stability
Maximum inflation rate 15 above the average of the three EU member states with lowest inflation
Exchange rate stability
Stable exchange rate within the ERM without devaluing on its own initiative
Budget discipline
Maximum publicsector deficit 3 of the country’s GDP
Maximum public debt 60 of the country’s GDP
3ESCB(European System of Central Banks)
ECB + EU National Central Banks
It consists of the European Central Bank in Frankfurt plus 12 national central banks
It conducts monetary policy for the euro zone
It is dependent on politicians in two respects
The ESCB’s members are political appointments
The Maastricht Treaty leaves exchange rate policy for the euro zone ultimately in the hands of the political authorities
4the Stability and Growth Pact
The mediumterm budgetary objective of positions close to balance or in surplus
A timetable for the imposition of financial penalties on counties that fail to correct situations of excessive deficits and debt promptly enough
5the choice of the single currency
加入EMU趋标准
Convergence criteria(to join EMU)
Price stability
Maximum inflation rate 15 above the average of the three EU member states with lowest inflation
Exchange rate stability
Stable exchange rate within the ERM without devaluing on its own initiative
Budget discipline
Maximum publicsector deficit 3 of the country’s GDP
Maximum public debt 60 of the country’s GDP
欧元区国家？
11 countriesFranceGermanySpainPortugalItalyAustriaFinlandGreeceIrelandBelgiumNetherlands
采取欧元原
1 To enhance Europe’s role in the world monetary system
2 To turn the European Union into a truly unified market
3 The single currency will facilitate trade between the participating economies
4 The euro will also have a significant impact on the macroeconomic framework of the participating economies andindeedon those outside the eurozone
5 The euro will also have a significant impact on the global economy
6 The euro will thus be one of the major global reserve currenciesalongside the US dollar and the Japanese yen
APEC原工作框架
Principles
Comprehensiveness
WTO Consistency
Comparability
Nondiscrimination
Transparency
Standstill
Simultaneous start continuous process and differentiated timetables
Flexibility
Cooperation
APEC＇s Scope of work
Trade and investment liberalization
Business facilitation
Economic and technical cooperation (Ecotech)
NAFTA初原影响危害
Rules of origin
incredibly complex with over 200 pages with thousands of different rules for different products many are protectionist
to guard against a firm’s ruse of doing minimal processing within the area and then claiming that the product is locally produced
The effects of NAFTA
the gains from trade creation and other effects are larger than the losses from trade diversion
all three countries will be slight net gains(Mexico Canada the US)
NAFTA will raise national incomes and even the demand for labor
Harm
the main sectors where US incomes and jobs are lost to Mexican competition are lessskilled industries like apparel (clothing) field crops (tomatoes) furniture and autos
NAFTA causes some trade diversion esp from Asia Asian makers of cars clothing furniture financial services and hightech equipment suffer losses
the losses made by the producers from the rest of the world because of NAFTA rules of origin
TOPIC Trade and Environment
References
PPTtrade&environmentppt
TextbookCh12 Trade and the Environment
贸易反环境？
No
Free trade permits production to be shifted to countries that have lax environmental standardsThe effects are small
costs to firms of meeting environmental protection regulations are usually small
fears of unexpected liabilities in cases of accidents general risks to corporate reputations from appearing to cause excessive harm to the environment and the costs of meeting more stringent regulations in the future
Free trade is not inherently antienvironment
Relocation of production to avoid stringent environmental standards is small
Shifts towards freer trade cause a variety of changes but the net effects on overall pollution usually seem to be small
贸易环境影响效应
1 composition effect
pollutionintensive production tends to expand in the highincome industrialized countries and pollutionintensive production tends to decline inn the lowincome developing countries
2 combined sizeincome effects
tend to lower pollution in the industrialized countries for sulfur dioxidesuspended particulatesand carbon monoxide
tend to increase nitrogen dioxide pollution in the European Union and Japan
tend to increase pollution in the developing countries
环境均收入影响
Three basic patterns of combined sizeincome effect
1 Environmental harm declines with rising income per person
2 environmental harm rises with rising income per person
3 The relationship is an inverted U
WTO制定三条环保框架
Three important types of policies that may qualify for environmental exceptions
consumption of products can cause damage
production in foreign countries can cause environmental damage
there are some environmental problems that are global in scope and that ma require global solutions negotiated among many governments
外部性定义表现
DefinitionAn externality exists when sb’s activity brings direct costs or benefits to anybody who is not part of the marketplace decision to undertake the activity
PerformanceWhenever an externality exists there is a distortion caused by a gap between private and social costs or benefits(SMC>MC)
改变外部性方法处方
Two leading strategies to attack the externality directly
use of government taxes and subsidies
changing property rights
Two sets of bestfeasible prescriptions
one for the whole world acting as one government
one for a single nation unable to get cooperation from other governments
三种外部成源
Trade and domestic pollution
Transborder pollution
Global environmental challenges
国污染部化导致果
If there is no policies that force market decisionmakers to internalize these external costsit leads
free trade can reduce the wellbeing of the country
the country can end up exporting the wrong products
境污染解决方案（案例分析）
The right solution
1 a government could use the taxsubsidy approach
2 assigning property rights to try to get the efficient solution
A nextbest solution
3
by adopting policies toward international trade
by limiting its imports from Germany if Austria imports paper from Germany
by considering subsidizing paper exports to Germany if Austria exports paper to Germany
全球环境面挑战
extinction of species
overfishing
CFCs and Ozone
greenhouse gases and global warming
TOPIC Multinational Enterprises
References
PPTmultinational enterprisesppt
TextbookCh14 Multinationals and Migrationppt
跨国公司引发发达国家担忧
being both the sources and the recipients of direct investment
whether flowing out DI reduces exports of products and employment opportunities at home
exploitation
inadequate access to foreign capital technology marketing and management skills
whether foreigners establish undue influence and control over the local economy with DI flowing in
限制FDI方法
certain lines of activity including natural resources banking newspapers and other commuincations media and defense industries
regulate the local operations of foreign firms (require local participations in the ownership or management training locally purchased components and parts locla research or expoets)
use tax policy to influence the flows of DI and the division of the investment returns btw firms and governments
鼓励FDI方法
offering various forms of subsidies
FDI定义
The flow of funding provided by an investro or lender (usually a firm) to establish or acquire a foreign company or to expand or finance an existing foreign
company that the investor owns and controls
Any flow of lending to or purchases of ownership in a foreign firm in which the investor (usually a firm) has (or gains) ownership of 10 percent or more of the foreign firm
国际投资组合定义
International portfolio investment is used for all foreign investments that do not involve management control(that isall that are not direct investments)
跨国公司定义组成
A firm that owns and controls operations in more than one country is a multinational enterprise(MNE)
MNEs
parent firm – foreign affiliates
home country –host countries
MNE use flows of FDI to establish or finance its foreign affiliates
跨国公司FDI存量流量分析
flows of FDI (measuring new equity investments and loans within MNEs during a period of time)
stocks of FDI (measuring the total amount of direct investments that exist at a point in time)
跨国公司什存
Why do MNEs exist–the eclectic approach by John Dunning
inherent disadvantages of veing foreign
firmspecific advantages (to overcome the inherent disadvantages)
location factors (that favor foreign production over exporting)
internalizaiton advantages (that favor direct investment over contracting with independent firms)
oliopolistic rivalry (among multinational enterprises)
国家跨国公司利润征税跨国公司应策略
1
hostcountry government taxes the profits of the local affiliates
homecountry government taxes the parent company＇s local profits earned on its own activities
home country government usu Avoid double taxation of the foreign affiliate profits
tax rates vary across host countries
2
MNEs try to minimize the total taxes that they pay
So
MNE can shop around among countries and locate its affiliates in the jurisdictions of govrenments offering lower tax rates
MNE can use transfer pricing and other devices to trport more of their prodits in lowtax countries even if the profits were acturally earned in hightax countries
转移定价理福利分析（6种税前税分世界福利投资母国福利东道国福利影响）
1
Transfer pricing
the setting by the company of prices (or monetary values) for things that move btw units of the company
including materials and components dinished products the rights to use technology and brand names and financila capital
Governments＇ attitude towards price transfer
attempt to polce transfer pricing to ensure that the transfer prices used between units within a MNE are similar to the market prices that independent firms would pay to each other for similar transactions
2
Welfare analysis is to be seen at TextbookCh 14the table of page 353
贸易FDI关系
Complementas long as transport costs and trade barriers are low enough FDI can be used to reduce total costs by locating different stages of overall production in difffernt countries which leads to more trade
Substitutewhen scale economies are less important or when transport costs and trade barriers are higher foreign production through direct investment substitute for international trade
Most studies conclude that FDI on average is somewhat complemenatray to international trade
投资母国应应该限制资外流？
The effect on workers and others who provide inputs into production in the home country
The effecs on the owners of the multinational enterprieses based in this home country
The effects on the government budget esp the effects on government tax revenues
Any external benefits ro costs associated with direct investments out of the country
东道国应应该限制资流？
Direct economic effects
Workers in the host country gain form increased demand for their services as do other suppliers of inputs to the affiliates of foreign multinationals
The host country government gains from the taxes collected on affiliate profits as long as these exceed the extra xosts of any additional governmnet services provided to the affiliates
Domestic firms that must compete with the affiliates lose
Indirect economic effects
positive externatlities such as technology marketing capabilites and managerial skills to the host country
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TOPIC Globalisation
References
EssayGlobalisation and Economic Growth
EssayGlobalisation and the Rural Poor
EssayIs Globalisation in Danger
PPTintroductionppt
PPTdeveloping countriesppt
PPTtransformation economiesppt
TextbookCh9 Developing countries
TextbookCh10 The Transformation countries
全球化定义
Liberalization of trade investment production and other factors
全球化成
1 The first and perhaps more profound influence is technological change
2 Multilateral trade negotiations resulted in the continuing liberalization of trade and investment
3 Globalization has also been promoted by the widespread liberalization of investment transactions and the development of international financial markets
4 Falls in transport and communications costs
全球化优点
1Productivity increases faster when countries produce goods and services in which they have a comparative advantage Living standards can increase more rapidly
2 Global competition and cheap imports keep a constraint on prices so inflation is less likely to disrupt economic growth
3 An open economy promotes technological development and innovation with fresh ideas from abroad
4 Jobs in export industries tend to pay about 15 more than jobs in importcompeting industries
5 Unfettered capital movements provide the US access to foreign investment and maintain low interest rates
全球化缺点
Globalization can make the domestic economy vulnerable to disturbances initiated overseas
1Millions of Americans have lost jobs because of imports or shifts in production abroad Most find new jobs that pay less
2 Millions of other Americans fear getting laid off especially at those firms operating in Importcompeting industries
3Workers face demands of wage concessions from their employers which often threaten to export jobs abroad if wage concessions are not agreed to
4 Besides bluecollar jobs service and whitecollar jobs are increasingly vulnerable to operations being sent overseas
5American employees can lose their competitiveness when companies build stateoftheart factories in lowwage countries making them as productive as those in the US
全球化导致分化时代？
I don＇t think soThe divergence claim is weakenedThe world income inequality peaked around 1970 has declined somewhat in the era of unprecedented globalisation since thenThis outcome has been driven primarily by the much improved growth performance of two developing countriesChina and India
全球化济增长否利？
There would be a cautious response
Firstdistance still matteredTrade flows technology flows financial flows and capital movements are all much reduced the greater is the distance between countriesMoreover distance from markets and sources of supply is highly correlated with income levels
Secondinstitutional quality also has a very strong influence on growth and levels of income particularly with respect to capital markets both as a key influence on growth performance and in terms of facilitating successful participation in globalised finance At the same time there clearly is an important role for institutional diversity in rapid catchup growth
全球化收入等减弱甚终趋？
Lucas argues that
1 While the 20th century was marked by widening international income inequality the 21st century will see this reversed
2 While capital is fully mobile internationally international income inequalities should be rapidly reduced as capital flows from rich to poor countries
3 The process of economic catchup and convergence ensues which exhibits an inverse correlation between initial income levels and subsequent growth of real income per head
Lucas model
The model is shown to exhibit rising international inequality of incomes in the 20th followed by a strong turnaround in the 21st centuryThat is to saycountries that start growing later have faster initial growth and then experience growth proportional to income gap with leader
Lucas criticize
aThe new economic geography school sees the process of development not as the steady convergence of the poor to the rich but rather as a rapid transition of a select few who are favoured by location
bThe new institutional economic history view pioneered that institutions are crucial in informing decisions to invest andor to innovate But the tradition also stresses that bad institutions are frequently persistent and can be virtually impossible to reform because of path dependency In the absence of welldefined property rightsenforceable contracts and government the neoclassical catchup process will be aborted
cGovernment also has a crucial role to play in combatting coordination failures and instability in the financial system both of which potentially undermine investment
dThe distribution of the gains from international trade deserve some attentionA limiting case would be one of immiserising growth in which increases in productive potential were more than offset by declines in export prices and loss of purchasing power over imports
全球化农业影响
Globalisation declined information and communications coststrade protectionismtariff and nontariff barriersWhile the expansion of agricultural trade has laggedreflecting the generally lower income elasticities of demand for primary goodsand its share in total world trade has been fallenIn shortagricultural liberalisation has so far made limited progress
1 Agricultural liberalisation model is not working well because it is noe being appliedie because of extensive continued protectionism within OECD
2 Similarlywithin many developing countries liberalisation remains partialindustrial protectionism and other other antiagricultural biases persistand market outcomes often differ markedly from the theoretical ideal
3 Any residual tendency for the forces of globalisation to favour developing country labourintensive agriculture tends to be offset by biases in technological progress in favour of temperate crops and capital and skillintensity
全球化贫困影响
Globalisation is liable to change the welfare of the rurul poor by influencing the efficiency of resource usethe pace of economic growthand the distribution of incomethrough their impact on technologieson the security of livelihoodson policies and on the provision of public goods
Ways of affecting the welfare of rural poor
static effciency effectsdynamic growth effectstechnological progressdistributional effectsinsecurity effectspolicy effects
GOODsThere is a huge potential benefitfor examplefrom an acceleration of growth following from fuller integration into a rapidly expanding market for exportsThere are benefits to be had from more productive resource usesfrom improved access to technological advances and from policy improvements induced by exogenous pressures
BADsAgainst thesethere are very real dangers that the rural poor will be left behindthat they will not have access to the knowledge and other assets necessary for success in an increasingly competitive worldthat food security may be reducedthat continuing political and policy biases will diminish their prospects of sharing in the potential benefitsand that globalisation will be associated with widening income disparties
There are some determinants of outcomes
exogenous factorsmarket accessmarket failuresthe assets of the rural poor
A variety of factors prevent the rural poor from responding as well as they might to market opportunities and heightened competitionthe forces limiting their market access(poor informationweak institutionspoor infrastructureetc) and their inadequate command over assets that would raise their market effectivenessnotably educationlandwater and finance
A tendency towards intensifying inequalities of income and wealthas well as heighted instability and uncertainlyprevent general economic progress from being translated fully into improvements in the wellbeing of the poor
全球化威胁
Ideas
Interests
Institutional Relations
Instability
国际金融危机原
Big problems in international financial systemfrom dollar shortage to dollar glut
Reasons for US chronic international deficit
too much inflation at home
overgenerosity in the aid and military programs
lack of trust in the dollar
the rapid growth of productivity abroad
high investment abroad by American firms
quadrupled price of OPEC oil
全球化区域体化关系
1 Regional integration and globalisation are staggered to promote each other Regional integration is part of globalisation globalisation is the development direction of regional integration
2 Globalisation has a broader scope than regional integration and regional integration has a higher level than the globalisation
3 The strengthening of regional integration will improve the position and enhance the force of the members in the process of globalisation
4 Regional integration and globalisation are both the means of transnational optimal allocation As a result of the regional blocs have similar geographypoliticsincomedevelopment level and economic advantagesthey are more easy to achieve the free movement of factors of productionaccordingly paving the way for globalisation
发达国家二战格局发展历程
Stage 1 recovery of world economy (19451952)
Characteristicsincreasing GNP growth for main market economy countries
Stage 2 highspeed growth of world economy (19531973)
Characteristicshighspeed growth
Reasons third scientific and technological revolutionadjustment of production relations
Stage 3 stagflation (19731982)
Characteristicslower GDP growth rate and higher CPI
Reasonsdeficit finance debt increase monetary supply increase increasing petroleum price surplus production capability international facors
Stage 4 economic readjustment and reform period (1983)
Characteristicsreduce government expenditurelower tax ratereduce monetary supplyenterprise privately ownedindustrial structure readjustment
发展中国家定义
Underdeveloped economically in the transition from traditional economy to modernezed economyIn a broader sense the rest of the nations and regions except developed countries
发展中国家特征
1 Undeveloped productivity
agriculture
industry
science &technology
2 Dualist structure
3 Imperfect market system and mechanism
4 National capitalism
5 Dependence on DCs
发展中国家发达原
1 Excessive population growth
2 Missing institutions
3 Lack of capital formation
4 No entrepreneurship
5 National debt
6 Vicious circle
7 Different endowment conditions
发展中国家发展策略
1 Import substitute(inward)
DefinitionThis policy was directed at replacing imports by domestic goods
Measures
Protectionist instrumentsimport duties &import licenses
Control on foreign exchange
Revalue domestic currency
Preferential policies for new industries
Performance
Faster development of national industries
Lack of scale of economies difficult to access international market
Less export of agricultural products decreasing exchange foreign income
Increased demands for imported equipments technology & parts imbalanced payment of account
Countries and outcomes
Latin Americafailed
2 Export diversification(outward)
DefinitionThis policy was to expose to export sectors to international competition and diversify exports
Measures
Loosen trade restriction
Laborintensive products to capitalintensive & technologyintensive products
Flexible trading system with government and nongovernment organizations involved
Found export processing areas
Performance
Increase interest rate
Improve the quality of education
Governmentguided management system
Combination of economic growth &reasonable distribution of income
Countries and outcomes
Asiasucceeded
转型国家定义
Countries gave up central planning and switched over to a market economy approach
转型国家特征
1 Institutional framework
Law of contract
Law of enterprises
Property rights
Twotier banking system
2 Macroeconomic stabilization
Monetary stabilization
inflation
currency reform and convertibility
tight budget restrain
reduction of government budget deficits
3 Real adjustment of firms
Start of microreforms
Autonomy of firms
Abolition of the government export monopoly
Markets instead of central planning
Free market entry
Implementation of microreforms
Freeing of prices (on commodity and factor markets)
Free trade no subsidies for tradable goods
Commercialization of firms
Privatization of enterprises
New enterprises
转型国家济发展J曲线效应
The transformation of a centrally planned economy involves a collapse of national output
Reasons
1 A crucial reason for this breakdown is that the capital stock of the transformation country that was obsolete
Thereforethe reform countries have to rebuild their capital stock
But it istimecostinginvolving adjustment costsexisting human capital integrated
2 institutional vacuum at the beginning
转型国家济政策
1 Privitization
mainly coupon privitization
2 The tightening of the budget restraint
transformation countries are often characterized by high budget deficits
3 Current account deficits
4 Inflation
TOPIC International Institutions
References
PPTinternational institutionsppt
PPTWTO &international trade policyppt
TextbookCh14 International Institutions
TextbookCh5 International trade policy
IMF目标
1 Convertibility
The IMF determined the circumstances in which countries made their national currencies convertible with other currencies
2 The exchange rate regime
The IMF decided on the ways in which currency values were to be correctedand the choice to be made between fixed and flexible exchange rates
3 Balance of payments adjustment
The IMF resolved how balance of payments surpluses and deficits were to be accommodated between countries
4 Reserve assets (first SDRs)
The IMF held reserves from which debtor countries could borrow in limited quantitiesIn 1970 the first special drawing rights(SDRs) were allocated to memebersand IMF is a large holder of gold reserves
5 International management
The IMF provided machinery for consultation and collaboration on international monetary problems
改革IMF角色
1 Still had a role to play in relation to convertibility exchange rates & balance of payments adjustment
2 Responsibility of ensuring that
not engage in destabilising speculation over exchange rates
not attempt to influence artificially the value of exchange rates in order to gain a trading advantage
斯蒂格利茨IMF改革提案
To disclose the poverty and unemployment impact of its conditionality requirement
To pay more attention to improving safety nets in vulnerable countries
To deal with financial crisis is through bankruptcynot through IMFfinanced bailout of creditors
Responses to financial crisis in developing and transition economies need to be placed within the social and political context
华盛顿识容
The emphasis is on marketfriendly’ economic reform
For the IMF the most important aspects of reform are still geared to stabilizationie
Fiscal and monetary austerity
Exchange rate liberalisation
Relaxation of controls on trade
Relaxation of controls on capital movements
WB目标
1 Changed substantially since its founding to finance postwar reconstruction in continental Europegranting loans to developing countries
2 It borrows on world markets and lends to needy countries for development purposes
WBIMF理区
Theoretical difference of the IMF & WB
WBthe institution which provides longterm development finance for developing and transition economies at relatively low rates of interest
IMFthe institution which provides developing and transitional countries with shortterm finance to tide over balance of payments problems
WB发展框架
Require partnership
Localization
Urbanization
Development challenges principally poverty hunger illhealth lack of housing & illiteracy
GATT目标
Its objective was to prevent a return to the protectionist measures which had so damaged world trade during the 1930s
乌拉圭回合条款
Main provisions in Uruguay Round
The multifibre arrangement (MFA)to be phased out
Agriculture to be brought within the provisions of GATT
rules to cover intellectual property rights(IPRs)
for the 1st time to cover services
voluntary export restraints(VERs) to be phase out
WTO成立
The final act of the Uruguay Round established a formal organisation called the WTO to replace GATTThis is generally considered to be the most important achievement of the Uruguay Round
WTOGATT区
WTO framework is superior to GATT
a single undertaking with a unified legal basis( cf merely a series of multilateral trading agreements)
clear surveillance mechanisms to oversee trade policy
provisions for the WTO to consult with the IMF and the World Bank
all countries within WTO agree to abide by the rules(cf ＇provisional accession protocols＇)
WTO贸易集团歧视法
Ways in which trade blocs can be made as nondiscriminatory as possible
required to cut their tariffs against outsiders to the lowest level of any member of the trade bloc
obliged to notify the WTO well in advance
the WTO should monitor existing trade blocs very closely
WTO惠国原
WTO＇s MFN principletrade barriers should be lowered equally and without discrimination for all foreign trading partners
It has two deviations
special treatment for developing countries
permitting trade blocs involving industrialized countriesif the trade blocs removes tariffs and other trade restrictions on most of the trade among its membersand if its trade barriers against nonmembers do not increase on average
TOPIC Regional Integration
References
EssayEcnomic Survey of Western Europe
EssayEuropean Monetary Union
PPTRegional integration in the world economyppt
PPTHistory of Regional Economic Integrationppt
PPTCharacteristics of RTAsppt
PPTRTAs in the Atlanticppt
PPT(European) Economic integrationppt
PPTEU single currencyppt
PPTAPECppt
TextbookCh11 Regional integration in the world economy
TextbookCh11 Trade Blocs and Trade Blocks
区域体化五种形式特点
1 Preferential trade agreement (PTAs)
least strict form
for certain goods among the members (sometimes even unilaterally)
neither general reduction of internal tariffs nor a common external tariff within PTAs
one way (by DC to LDC) preferential arrangement
violates GATT article XXIV but tolerated by LDC enabling clause
2 Freetrade areas (FTAs)
abolish internal tariff but no common external tariff
elimination of tariffs and quantitative restrictions
rules of origin and strict controls of the origin of goods
3 Customs unions
abolish internal tariffs but with a common external tariff & a common trade policy toward third countries
common level of trade barriers against nonmembers
harmonize quantitative restrictions export subsidies and other trade distortions
4 Common market
deeper integration
free trade of goods services and free exchange of capital and labor
labor construction consulting
capital banking financial servicesand capital applies to both FDI and portfolio capital
5 Economic union
unify all their economic policies including monetary fiscal welfare policies & policies toward trade and factor migration
even common currency
区域体化原
economic reasons
political reasons
geographical reasons
economic profit
区域体化组织
1 Europe
EU(European Union)
EFTA(European Free Trade Association)
CEFTA(The Central European Free Trade Area)
2 The America
NAFTA
TAFTA(TransAtlantic Free Trade Area)
Andean Community
LAFTA (Latin American Free Trade Association)
CARICOM (the Caribbean Community)
FTAA(Free Trade Area of the Americas)
3 AsiaPacific
ASEAN(The Association for SouthEast Asian Nations)
AFTA (in discussion)
APEC(AsiaPacific Economic Cooperation)
ANZCERTACER (Australia New Zealand Closer Economic Relations Trade Agreementbetween Australia and New Zealand)
区域体化济贸易影响
static effects
trade creation(the net volume of new trade created by forming the trade bloc)
trade diversion(the volume of trade diverted from lowcost outside exporters to highercost blocpartner exporters)
The gains from a trade bloc are tied to trade creation and the losses are tied to trade diversion
dynamic effects
market effect
competition effect
investment inflow effect
expansion and deepening effect
区域体化集团增加贸易办法
1 Two tendencies to make for greater gains from a customs union
The lower the partner costs relative to the outsideworld costs the greater the gains Any trade diversion will be less costly
The more elastic the import demand the greater the gains The trade creation in response to any domestic price decline will be larger
2 Other possible gains from a trade bloc
creating a larger market
creating scale economies
reducing prices by increasing competition
lowering costs of production by increasing competition
firm’s lowering costs by expanding their scale of production
increasing opportunities for business investments
区域集中度影响素
Geographical proximity
Economic Size
Income level
Economic system
Distance and Adjacency
Language
Similar taste
Gravity Model
EU体化进程原
1
peace
wish to unify after WWII
fight against USA
Japan＇s economy highly developed
2
Firstlyby the ingeration of the economic policies of member statesin particular monetray and fiscal policies
Secondlyby the acceleration of market integration
Thirdlyby effectively operated as a single entity when dealing with the world＇s principal international economic institutions
EU体化进程简介
1 ECSC (European Coal and Steel Community)—France Germany Italy Luxemburg Netherland and Belgium—1952
2 EEC(European Economic Community) and Euratom (European Atomic Energy Community)—the six countries – 1958
3 EEC and Euratom are incorporated into EC(European Community) in 1967
4 EU (European Union)—Nov 1st 1993
5 Five enlargements
Great Britain Denmark and Ireland in 1973(9)
Greece in 1981(10th)
Portugal and Spain in 1986(12)
AustriaSweden and Finland in 1995(15)
PolandHungaryCzechSlovakiaSloveniaCyprusMaltaEstonia
Latvia etc(25)the most ambitious one –total population (045 billion)—similar economic scale with that of the US
6 Romania and Bulgaria are negotiating for joining EU
EU体化进程四阶段
1preparatory and experimental stage(WWI1957)
the important role France played
Robert Schuman(18861963) and Schuman Plan(1950)
Treaty on ECSC(Paris Treaty)(1951)—effective in 1952
2customs union(19581985)
Treaty on ECSC and Treaty on Euratom(Rome Treaty)(1958)
Content of Rome Treaty
Stipulation and arrangements of customs union
Achievements in the process of customs union establishmentCAP(Common Agriculture Policy)
3 common market(19861992)
Historical Background
Single European Act—SEM(Single European Market)
Schengen Agreements(BelgiumFranceGermanyLuxembourg and Netherlands in 1985)
4 Economic union (since 1992)
Treaty on European Union(Maastricht Treaty)
EU农业政策？
Why so much attention was given to CAP
food shortage during WWII
two main actors in EEC France and Germany
impacts of increasing price for agricultural products on economies
tranditional agricultural organizations
Guideline for CAP
To form single market for agricultural products
To stablize market for agricultural products
To take trade protectionism policy
EU体化进程成
Five enlargements
Maastricht Treaty
the Stability and Growth Pact(SGP)
CAP(Common Agriculture Policy)
single currency market
etc
EU体化进程出现问题
First of all there is lack of democracy TodayEU has been achieved in many areas of a supranational but the distance from ordinary people has become more and more far away
Moreoverthere is lack of consensus Facing the problems of how to improve the competitiveness of the economy strengthening social justice and globalisationInternal of EU has divergent viewsIt is difficult to reach an agreement
Finally there is lack of means many institutional reforms have laggedaffecting the capacity of the expanded EU＇s force
98年EU低出口增长原
Becasue of the instability of Asian economy which are important to EUMeanwhileEU look forward to a good future of Asian economy at the end of 20th century
欧洲单货币发展进程
1EMS
ERM(Exchange Rate Mechanism)—core of EMSmutually pegged exchange rates
ECU(European Currency Unit)
Central exchange rate
European Monetary Cooperation Fund
2From EMS to EMU
Delors Reportthreestage process for establishment of EMU
All EU members were to join the EMS exchange rate mechanism (ERM)
Exchange rate margins were to be narrowed and certain macroeconomic policy decisions placed under more centralized EU control
Replacement of national currencies by a single European currency and vesting all monetary policy decisions in a ESCB
Reasons
EU countries moved away from the EMS and toward the single shared currency for four reasons
Greater degree of European market integration
Same opportunity as Germany to participate in systemwide monetary decisions
Complete freedom of capital movements
Political stability of Europe
Convergence criteria(to join EMU)
Price stability
Maximum inflation rate 15 above the average of the three EU member states with lowest inflation
Exchange rate stability
Stable exchange rate within the ERM without devaluing on its own initiative
Budget discipline
Maximum publicsector deficit 3 of the country’s GDP
Maximum public debt 60 of the country’s GDP
3ESCB(European System of Central Banks)
ECB + EU National Central Banks
It consists of the European Central Bank in Frankfurt plus 12 national central banks
It conducts monetary policy for the euro zone
It is dependent on politicians in two respects
The ESCB’s members are political appointments
The Maastricht Treaty leaves exchange rate policy for the euro zone ultimately in the hands of the political authorities
4the Stability and Growth Pact
The mediumterm budgetary objective of positions close to balance or in surplus
A timetable for the imposition of financial penalties on counties that fail to correct situations of excessive deficits and debt promptly enough
5the choice of the single currency
加入EMU趋标准
Convergence criteria(to join EMU)
Price stability
Maximum inflation rate 15 above the average of the three EU member states with lowest inflation
Exchange rate stability
Stable exchange rate within the ERM without devaluing on its own initiative
Budget discipline
Maximum publicsector deficit 3 of the country’s GDP
Maximum public debt 60 of the country’s GDP
欧元区国家？
11 countriesFranceGermanySpainPortugalItalyAustriaFinlandGreeceIrelandBelgiumNetherlands
采取欧元原
1 To enhance Europe’s role in the world monetary system
2 To turn the European Union into a truly unified market
3 The single currency will facilitate trade between the participating economies
4 The euro will also have a significant impact on the macroeconomic framework of the participating economies andindeedon those outside the eurozone
5 The euro will also have a significant impact on the global economy
6 The euro will thus be one of the major global reserve currenciesalongside the US dollar and the Japanese yen
APEC原工作框架
Principles
Comprehensiveness
WTO Consistency
Comparability
Nondiscrimination
Transparency
Standstill
Simultaneous start continuous process and differentiated timetables
Flexibility
Cooperation
APEC＇s Scope of work
Trade and investment liberalization
Business facilitation
Economic and technical cooperation (Ecotech)
NAFTA初原影响危害
Rules of origin
incredibly complex with over 200 pages with thousands of different rules for different products many are protectionist
to guard against a firm’s ruse of doing minimal processing within the area and then claiming that the product is locally produced
The effects of NAFTA
the gains from trade creation and other effects are larger than the losses from trade diversion
all three countries will be slight net gains(Mexico Canada the US)
NAFTA will raise national incomes and even the demand for labor
Harm
the main sectors where US incomes and jobs are lost to Mexican competition are lessskilled industries like apparel (clothing) field crops (tomatoes) furniture and autos
NAFTA causes some trade diversion esp from Asia Asian makers of cars clothing furniture financial services and hightech equipment suffer losses
the losses made by the producers from the rest of the world because of NAFTA rules of origin
TOPIC Trade and Environment
References
PPTtrade&environmentppt
TextbookCh12 Trade and the Environment
贸易反环境？
No
Free trade permits production to be shifted to countries that have lax environmental standardsThe effects are small
costs to firms of meeting environmental protection regulations are usually small
fears of unexpected liabilities in cases of accidents general risks to corporate reputations from appearing to cause excessive harm to the environment and the costs of meeting more stringent regulations in the future
Free trade is not inherently antienvironment
Relocation of production to avoid stringent environmental standards is small
Shifts towards freer trade cause a variety of changes but the net effects on overall pollution usually seem to be small
贸易环境影响效应
1 composition effect
pollutionintensive production tends to expand in the highincome industrialized countries and pollutionintensive production tends to decline inn the lowincome developing countries
2 combined sizeincome effects
tend to lower pollution in the industrialized countries for sulfur dioxidesuspended particulatesand carbon monoxide
tend to increase nitrogen dioxide pollution in the European Union and Japan
tend to increase pollution in the developing countries
环境均收入影响
Three basic patterns of combined sizeincome effect
1 Environmental harm declines with rising income per person
2 environmental harm rises with rising income per person
3 The relationship is an inverted U
WTO制定三条环保框架
Three important types of policies that may qualify for environmental exceptions
consumption of products can cause damage
production in foreign countries can cause environmental damage
there are some environmental problems that are global in scope and that ma require global solutions negotiated among many governments
外部性定义表现
DefinitionAn externality exists when sb’s activity brings direct costs or benefits to anybody who is not part of the marketplace decision to undertake the activity
PerformanceWhenever an externality exists there is a distortion caused by a gap between private and social costs or benefits(SMC>MC)
改变外部性方法处方
Two leading strategies to attack the externality directly
use of government taxes and subsidies
changing property rights
Two sets of bestfeasible prescriptions
one for the whole world acting as one government
one for a single nation unable to get cooperation from other governments
三种外部成源
Trade and domestic pollution
Transborder pollution
Global environmental challenges
国污染部化导致果
If there is no policies that force market decisionmakers to internalize these external costsit leads
free trade can reduce the wellbeing of the country
the country can end up exporting the wrong products
境污染解决方案（案例分析）
The right solution
1 a government could use the taxsubsidy approach
2 assigning property rights to try to get the efficient solution
A nextbest solution
3
by adopting policies toward international trade
by limiting its imports from Germany if Austria imports paper from Germany
by considering subsidizing paper exports to Germany if Austria exports paper to Germany
全球环境面挑战
extinction of species
overfishing
CFCs and Ozone
greenhouse gases and global warming
TOPIC Multinational Enterprises
References
PPTmultinational enterprisesppt
TextbookCh14 Multinationals and Migrationppt
跨国公司引发发达国家担忧
being both the sources and the recipients of direct investment
whether flowing out DI reduces exports of products and employment opportunities at home
exploitation
inadequate access to foreign capital technology marketing and management skills
whether foreigners establish undue influence and control over the local economy with DI flowing in
限制FDI方法
certain lines of activity including natural resources banking newspapers and other commuincations media and defense industries
regulate the local operations of foreign firms (require local participations in the ownership or management training locally purchased components and parts locla research or expoets)
use tax policy to influence the flows of DI and the division of the investment returns btw firms and governments
鼓励FDI方法
offering various forms of subsidies
FDI定义
The flow of funding provided by an investro or lender (usually a firm) to establish or acquire a foreign company or to expand or finance an existing foreign
company that the investor owns and controls
Any flow of lending to or purchases of ownership in a foreign firm in which the investor (usually a firm) has (or gains) ownership of 10 percent or more of the foreign firm
国际投资组合定义
International portfolio investment is used for all foreign investments that do not involve management control(that isall that are not direct investments)
跨国公司定义组成
A firm that owns and controls operations in more than one country is a multinational enterprise(MNE)
MNEs
parent firm – foreign affiliates
home country –host countries
MNE use flows of FDI to establish or finance its foreign affiliates
跨国公司FDI存量流量分析
flows of FDI (measuring new equity investments and loans within MNEs during a period of time)
stocks of FDI (measuring the total amount of direct investments that exist at a point in time)
跨国公司什存
Why do MNEs exist–the eclectic approach by John Dunning
inherent disadvantages of veing foreign
firmspecific advantages (to overcome the inherent disadvantages)
location factors (that favor foreign production over exporting)
internalizaiton advantages (that favor direct investment over contracting with independent firms)
oliopolistic rivalry (among multinational enterprises)
国家跨国公司利润征税跨国公司应策略
1
hostcountry government taxes the profits of the local affiliates
homecountry government taxes the parent company＇s local profits earned on its own activities
home country government usu Avoid double taxation of the foreign affiliate profits
tax rates vary across host countries
2
MNEs try to minimize the total taxes that they pay
So
MNE can shop around among countries and locate its affiliates in the jurisdictions of govrenments offering lower tax rates
MNE can use transfer pricing and other devices to trport more of their prodits in lowtax countries even if the profits were acturally earned in hightax countries
转移定价理福利分析（6种税前税分世界福利投资母国福利东道国福利影响）
1
Transfer pricing
the setting by the company of prices (or monetary values) for things that move btw units of the company
including materials and components dinished products the rights to use technology and brand names and financila capital
Governments＇ attitude towards price transfer
attempt to polce transfer pricing to ensure that the transfer prices used between units within a MNE are similar to the market prices that independent firms would pay to each other for similar transactions
2
Welfare analysis is to be seen at TextbookCh 14the table of page 353
贸易FDI关系
Complementas long as transport costs and trade barriers are low enough FDI can be used to reduce total costs by locating different stages of overall production in difffernt countries which leads to more trade
Substitutewhen scale economies are less important or when transport costs and trade barriers are higher foreign production through direct investment substitute for international trade
Most studies conclude that FDI on average is somewhat complemenatray to international trade
投资母国应应该限制资外流？
The effect on workers and others who provide inputs into production in the home country
The effecs on the owners of the multinational enterprieses based in this home country
The effects on the government budget esp the effects on government tax revenues
Any external benefits ro costs associated with direct investments out of the country
东道国应应该限制资流？
Direct economic effects
Workers in the host country gain form increased demand for their services as do other suppliers of inputs to the affiliates of foreign multinationals
The host country government gains from the taxes collected on affiliate profits as long as these exceed the extra xosts of any additional governmnet services provided to the affiliates
Domestic firms that must compete with the affiliates lose
Indirect economic effects
positive externatlities such as technology marketing capabilites and managerial skills to the host country
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