BUSM028 Week 4 G3 by Rym Mouelhi https://padlet.com/rmouelhi1/35ic0or4awkughvv Seminar activity en-us 2022-02-12 17:57:51 UTC 2022-02-18 14:37:12 UTC hello@padlet.com The new trade theory explains intra industry trade, while the traditional trade theory explains inter industry trade; The hypothesis of new trade theory is imperfect competitive market, while the premise of traditional trade theory is perfect competitive market; Traditional trade theories are studied from the perspective of supply, and the new trade theory is also explained from the perspective of demand. https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055064650 2022-02-18 11:14:05 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055064650 Because of the imporance of scale in NTT, countries that are developing may have a more difficult time catching up in certain industries because they lack the ability to produce on a scale that allows them to compete adequately. https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055069514 2022-02-18 11:18:29 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055069514 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055069778 Rich determine the specialization of the poor. In a way that is advantageous for the rich countries. Poor countries are systematically shunted into activities that are less beneficial to them. They are pushed away from more industrial activities. e.g. Latin America

]]> 2022-02-18 11:18:44 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055069778 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055073731 it will cause monopolies and prejudice the global trade.

]]> 2022-02-18 11:22:06 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055073731 and why is having monopolies or oligopolies bad or a cause for a conflict? can you give some examples? rmouelhi1 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055075808 2022-02-18 11:24:02 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055075808 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055076143 Neoclassical assumes imperfect competition

  • NTT focuses on increasing returns to scale
  • NCT countries shouldn’t worry about what area to specialise in and it Wille eventually reflect in comparative advantage.
  • NTT pushes developing countries into subservient roles
  • Labor force can’t immigrate from one country to another in NCT but this is possible in NTT
]]> 2022-02-18 11:24:21 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055076143 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055077391 Neoclassical models predict trade based on productivity or endowment differences.
NTT is explains scale-based, intra-industry trade between similar countries with ambiguous but not uneven welfare effects.NTT also includes NEG. NEG C-P predicts trade based on a love of variety (intraindustry), scale economies and trade costs, with major uneven development resulting.]]> 2022-02-18 11:25:34 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055077391 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055077800 The implications of NTT outweigh the theory of comparative advantage. Two countries may have no differences in opportunity cost at some point, but if one specializes in an industry, it gains economies of scale. Also, Countries entering the market early can be a dominant one in the world, because there will be limited competition (monopolistic competition). Thus, poorer or late entry countries may struggle to develop as the EoS has already been enjoyed by developed ones.]]> 2022-02-18 11:25:57 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055077800 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055078951 First of all, countries should expand their internal market in order to obtain the corresponding effect of increasing returns to scale，then their export will be competitive.

]]> 2022-02-18 11:27:08 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055078951 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055080005 having monopolies is bad because there will be price-fixing, less innovation, consumers will not have much choices, and quality of products may be low too]]> 2022-02-18 11:28:08 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055080005 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055080039 They can use the market power to increase prices which isn't beneficial for consumers and leads to overall increase of complementary goods?

]]> 2022-02-18 11:28:09 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055080039 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055081087 Strategic Trade Policy:
The government have to use strategic trade policy by shifting the profits from internationally to the domestic level and in this way, the level of the welfare of the economy can be enhanced.

]]> 2022-02-18 11:29:08 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055081087 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055082224 Because of increased risk of exploitation and unethcal business practices due to relative power of monopolistic firms or economies. If there are no other competitors, a company or economy has the ability to act without risk of losing business]]> 2022-02-18 11:30:06 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055082224 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055082622
  • ich countries cound take advantage of labor costs and environment
  • rich countries are determining the speicliazinations of poor countries. it is not determined by H-O hence they are pushed into more industrial activites insetad of developing their own
  • imporportionate growth between rich and poor countries. for example india and china after 1750 productivity decreased while UK and europe increased in that decade

    • ]]>     2022-02-18 11:30:30 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055082622     https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055085518  Developing countries may struggle to ever develop certain industries because they lag too far behind the economies of scale enjoyed in the developed world,]]> 2022-02-18 11:32:49 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055085518 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055085625 Governments could also adopt a trade policy that encourages FDI, allowing for the opportunity to increase infrastructure and capital to build economies of scale]]> 2022-02-18 11:32:55 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055085625 how can they encourage or push local industries that bring EoS? rmouelhi1 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055087611 2022-02-18 11:34:38 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055087611 What will be the consequences if the government chooses the wrong industry? What if the selected industry doesn't bring EoS? rmouelhi1 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055089103 2022-02-18 11:35:55 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055089103 And what are the consequences for countries? if we have big markets in strategic locations, firms and countries will compete to move there first, right? Can you think about historical consequences? rmouelhi1 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055091337 2022-02-18 11:37:59 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055091337 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055091996
  • trade war between china and the US over erected tariffs on Chinese goods
  • Brexit - conflict over hopes to get better trade deals with other countries than EU

    • ]]>     2022-02-18 11:38:31 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055091996     https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055092488 If the government go for a wrong industry it will result in worst underdeveleopment or monopolisitc competition]]> 2022-02-18 11:38:54 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055092488 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055094311 International trade can enable developing countries to participate in more economic activities and trade, and can also improve the national economic level. However,there is also saying that poor locked into perpetual laggard status – Shunted into less productive industrial segments.Hence trade hurts their progress by inhibiting breadth of activity.]]> 2022-02-18 11:40:36 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055094311 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055098312 One of the successful example I can think of is Japanese car industry ]]> 2022-02-18 11:43:16 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055098312 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055098821 Developing countries need to establish the advantages of economies of scale and consciously improve production efficiency in order to survive in the international trade environment.]]> 2022-02-18 11:43:46 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055098821 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055098997 If the government chooses the wrong industry, then the country will lag further behind ]]> 2022-02-18 11:43:57 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055098997 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055101476 government support in long term may also cause inefficiency and reliance ]]> 2022-02-18 11:46:03 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055101476 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055102792 In order to encourage local industries that bring EoS, governments should specify their national competitive advantages, find new technologies and new ways of doing things through technology and innovation. ]]> 2022-02-18 11:47:16 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055102792 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055107845 In terms politics, if an industry grows and becomes important to a region, it may gain greater political bargaining power and local politicians will seek to gain favorable terms for their local industry – in the form of subsidies/tariffs.]]> 2022-02-18 11:51:35 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055107845 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055121548 Promulgate some corresponding industrial policies and policies on trade barriers]]> 2022-02-18 12:03:50 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055121548 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055332755  The new trade theory holds that the comparative advantage as the basis of trade is not static, especially in knowledge and technology intensive industries. Due to the strong external economy, the variability of comparative advantage is more obvious, so it is possible to support some domestic industries through the conscious intervention of government economic policies, Make it break through the constraints of existing resource endowment and technical level, and artificially create comparative advantages.]]> 2022-02-18 14:27:48 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055332755 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055333138 In the market economy, the government should actively promote the improvement of the market economic system, strengthen the construction of the market environment, actively promote the development of free trade, and improve the backup support for the competition and innovation of enterprises. For example, improve the investment in educational facilities at all levels, improve the construction of public service infrastructure, and establish and improve relevant policies and regulations]]> 2022-02-18 14:28:01 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055333138 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055335555 The government can support or protect domestic enterprises to increase their output in the international market, continuously improve their profit share and better improve their welfare level, so as to promote the formation of economies of scale. On the other hand, on the premise of improving the technical level, the marginal cost curve of manufacturers will move down. In other words, the government supports and intervenes in the technological production level of enterprises to realize the development of economies of scale.]]> 2022-02-18 14:29:24 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055335555 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055346743 For developing countries, due to the low per capita income and the narrow scale of the domestic market, the expansion of manufacturers' production scale is limited. Moreover, due to historical reasons, the industries with economies of scale are mainly infant industries, and their scale is still relatively small. As for those modern high-tech industries with extensive external economy, a considerable number of developing countries, especially small developing countries, have not even started, let alone economies of scale.]]> 2022-02-18 14:35:47 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055346743 https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055349537 Taking China as an example, due to the local protectionism caused by the long-term planned economy and financial contract system, China lacks a unified domestic market. Although the market potential is great nationwide, there are still considerable differences compared with developed countries in terms of internal economies of scale and external economies of scale.
    In terms of enterprise agglomeration economy, the production areas of some products in China, especially those with high prices and large profits, are scattered, so it is impossible to form an agglomeration economy. In 1990, most of China's 15 important manufactured products were produced in more than 25 regions, including products with high technical requirements, such as automobiles, watches, soda ash, chemical fiber, etc., and the number of regions where the output of these products accounted for more than 5% of the country was no less than 6. The sum of the three regions with the highest output was only watches, bicycles, automobiles Chemical fiber and a few other products.]]>     2022-02-18 14:37:12 UTC https://padlet.com/rmouelhi1/35ic0or4awkughvv/wish/2055349537