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Cuando un país es autosuficiente, no necesita importar.

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Krugman - se defienden los acuerdos de libre comercio.

Bagwhati - conviene más que todos bajen las tarifas (global).

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Ha incrementado radicalmente los ingresos y el crecimiento económico en países en desarrollo.

Disminuyó el precio el precio al consumidor en países desarrollados.

Las ONG influyen más en políticas públicas más allá de las fronteras nacionales.

Permite a los individuos participar en relaciones sociales extendidas que cruzan las fronteras nacionales e internacionales.

Aporta interconexión entre diferentes poblaciones y culturas.

Difusión de elementos culturales como religión, tecnología, idioma, etc.

La competencia incrementa la cantidad y calidad de productos.

Algunos argumentan que el libre comercio aumenta prosperidad económica y de oportunidades.

Teoría de ventajas comparativas: conduce a reducción de precios, más empleo, producción y elevación del nivel de vida.

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The first “wave of globalization” started in the 19th century, the second one after WW2

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The first “wave of globalization” started in the 19th century, the second one after WW2

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Until 1800 there was a long period characterized by persistently low international trade – globally the index never exceeded 10% before 1800. This then changed over the course of the 19th century, when technological advances triggered a period of marked growth in world trade – the so-called ‘first wave of globalization’.

The first wave of globalization came to an end with the beginning of the First World War, when the decline of liberalism and the rise of nationalism led to a slump in international trade.

After the Second World War trade started growing again. This new – and ongoing – wave of globalization has seen international trade grow faster than ever before.

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Before the first wave of globalization, trade was driven mostly by colonialism

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Before the first wave of globalization, trade was driven mostly by colonialism

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The raw correlation between trade and growth

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The raw correlation between trade and growth

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-If we look at country-level data from the last half century we find that there is also a correlation between economic growth and trade: countries with higher rates of GDP growth also tend to have higher rates of growth in trade.

Among the potential growth-enhancing factors that may come from greater global economic integration are:

Competition

Economies of scale (they can operate at larger scales where the price per unit of product is lower)

Learning and innovation

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The available evidence shows that, for some groups of people, trade has a negative effect on wages and employment opportunities; and at the same time it has a large positive effect via lower consumer prices and increased availability of products.

For some households, the net effect is positive. But for some households, that’s not the case. In particular, workers who lose their job can be affected for extended periods of time, so the positive effect via lower prices is not enough to compensate them for the reduction in earnings.

Improvements in welfare are regressive, in the sense that richer households gain proportionally more.

There are aggregate gains from trade, but there are also real distributional concerns.

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Two flaws of capitalism: Inclines to suffering from workers, the wealth of companies is not built up on things that are not satisfying essential needs.

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Challenge: Make money humanely, address more noble end of human needs

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Ex. In order to make an Apple Watch workers suffer from abuse in China, it's not a sustainable product to make and it's not an essential need.

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Afecta la cultura de cada uno de los países afectados.

Empleos fronterizos-> trabajadores en países desarrollados cambien de carrera.

Como respuesta algunos países han adoptado políticas aislacionistas, como consecuencia los ciudadanos de esos países no pueden salir libremente del país.

Las prácticas culturales pueden perderse o convertirse en una fusión de tradiciones.

Puede llevar a artistas a desechar los instrumentos tradicionales.

Algunos críticos argumentan que daña la diversidad de culturas.

Algunos argumentan que puede llevar a la occidentalización o americanización de la cultura.

La competencia amenaza las condiciones de trabajo como salarios y derechos laborales.

Favorece la depredación del medio ambiente.

La presencia de multinacionales podría resultar en el empobrecimiento a largo plazo, debido al desplazamiento de empresas locales y exportación de ganancias.

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During the First Global Age, new global networks of exchange develop in goods such as sugar, fur, and silver.

Silver was used as a global currency, mined in Spanish colonies.

At this point, Europe still had a high demand for East and South Asian luxury goods.

China's demand for silver increased because they began to require taxes to be paid on silver.

Europeans transported goods by ships.

The Dutch and Portuguese started to pick up silver from Japan and brought it over to sell it to China.

Trade routes continue but experience changes over the years.

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Bilateral trade is becoming increasingly common, but it remains true that many countries still do not trade with each other at all.

South-South trade is becoming increasingly important: Up until the Second World War, the majority of trade transactions involved exchanges between this small group of rich countries. But this has been changing quickly over the last couple of decades, and today trade between non-rich countries is just as important as trade between rich countries.

The majority of preferential trade agreements are between emerging economies.

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The resistance that geography imposes on trade has long been studied in the empirical economics literature – and the main conclusion is that trade intensity is strongly linked to geographic distance.

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A country or a person is said to have a ‘comparative advantage’ if they have the ability to produce something at a lower opportunity cost than their trade partners.

Broadly speaking, the principle of comparative advantage postulates that all nations can gain from trade if each specializes in producing what they are relatively more efficient at producing, and import the rest: “do what you do best, import the rest”.

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1. Preferential Trade Agreements: This is a union in which member countries impose lower trade barriers on goods produced within the union. The ANDEAN Pact

2. Free Trade Area: This is a special case of PTA where member countries completely abolish trade barriers (both tariff barriers and non-tariff barriers) for goods origination within the member countries. Most agreements tend to exclude sensitive sectors. North American Free Trade Area (NAFTA) and the ASEAN Free Trade Area (AFTA)

3. Customs Union: Common level of trade barriers to non-members.  Member countries apply a common external tariff (CET) on a good imported from outside countries. The CET can vary across goods but not across union partners. MERCOSUR--------------------------------Shallow integration---------------------------------------DEEP INTEGRATION----------------

4. Common Market: Free movement of factors of production.  Where member countries attempt to harmonize some institutional arrangements and commercial and financial laws and regulations among themselves.

5. Economic Union: Integrating national economic policies and a common currency. EUROPEAN UNION

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Es un proceso económico, tecnológico, político, social y cultural a escala que consiste en la creciente comunicación e interdependencia entre los distintos países del mundo.

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Económico Ej. Flujo de capital internacional

Político Ej. Participación en instituciones multilaterales

Social Ej. Vuelos internacionales

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Transformaciones mediante las cuales las culturas adoptan y redefinen los productos de la cultura global para adecuarlos a sus necesidades, creencias y costumbres particulares.

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A new financial system that was created at the end of World War 2.

It was the first fully negotiated monetary order and it set rules for commercial and financial relations among the U.S., Canada, Western European countries, Australia and Japan.

Countries were concerned about a future financial crisis that would devalue their currency.

U.S. controlled 2/3 of the world's gold and insisted on currencies to rest on both gold and USD to end floating exchange rates.

Two institutions were created: IMF and WB.

The system did not survive.

The U.S. ran deficits to fund projects.

Gold reserves kept shrinking.

Nixon announced that dollars would no longer be convertible to gold.

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Fixed exchange rates to US dollar.

Short-term loans to countries struggling to pay their debts.

Fights financial crisis

Puts economic policies in place.

2,700 employees

Member countries pay quotas

Currently lending $160B

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Supposed to help low income countries to grow.

10,000 employees

Funded by issuing bonds

Lending commitments in 2007 $59B

Biggest borrowers: Africa and East Asia.

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189 members

Critics: Bailing out Greece, ignoring environmental and social impacts of projects.

Both promote global economic stability, make countries less vulnerable to crisis and higher living standards.

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Cuando se admite un nuevo producto reduciendo las tarifas.

Satisface la demanda pero si no se necesita afecta la producción nacional.

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Acuerdos regionales pueden llegar a optar por productores no eficientes.

Se necesita hacer una análisis para evaluar que los acuerdos no privilegien importaciones no eficientes (mala calidad).

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Every time you buy something you create a transaction.

Money + credit = total spending

A market consists of all the buyers and all the sellers making transactions for the same thing. Ex. cars

The economy consists of all the transactions in all of its markets.

Transaction: Exchange of money and credit for goods services and financial assets.

Credit is the most important part of the economy because when a borrower has credit he is able to increase his spending and spending drives the economy.

High-interest rates = less borrowing.