International Economics Dr. Petre Badulescu

Lecture 1, International Economics Today´s Lecture The Course´s literature, instruction and examination… Introduction - the main questions Start the International trade theory Dr. Petre Badulescu Lecture 1, International Economics

Lecture 1, International Economics The Course´s lectures, examination, reading instructions and schedule are on my Internet page, see below). Course webpage: http://surf.to/petre Dr. Petre Badulescu Lecture 1, International Economics

Lecture 1, International Economics Introduction On April 14, 2010, the Eyjafjallajokull volcano in Iceland roared to life after being dormant for more than two centuries. An event like this has dramatic consequences for international trade, the movement of goods and services across borders. Roughly 100,000 flights to and from Northern Europe were cancelled, and billions of dollars in air freight and millions of travelers were delayed, cancelled, or re-routed. In April 2010 the ash from Iceland's Eyjafjallajokull volcano disrupted air travel in Northern Europe and beyond. Dr. Petre Badulescu Lecture 1, International Economics

Lecture 1, International Economics Introduction In this course, we will study international trade in goods and services. We will learn the economic forces that determine what that trade looks like: what products are traded who trades them at what quantities and prices they are traded what the benefits and costs of trade are. And international movements of production factors. We will also learn about policies that governments use to shape trade patterns among countries. Dr. Petre Badulescu Lecture 1, International Economics

International Trade Theory The international trade´s causes and effects Why and how do nations engage in international trade? What goods and services do nations trade? What are the benefits and costs of trade? Should international trade be regulated? How do trade barriers affect trade and welfare? How are countries affected by international movements of production factors? Dr. Petre Badulescu Lecture 1, International Economics

How to study these questions? I will, during this course, attempt to give you a simple analytic toolkit which helps to study such problems as those mentioned above and weigh future events as they appear. We get then a theoretic framework which is sufficiently general to enable us to give explanations to different phenomena and make predictions about probable results of changes in the international surrounding. May continue with F&T 1.ppt, slides 4 --- May continue with F&T 1, slide 4! Dr. Petre Badulescu Lecture 1, International Economics

Lecture 1, International Economics International trade The Basics of World Trade Countries buy and sell goods and services from one another constantly. An export is a product sold from one country to another. An import is a product bought by one country from another. Dr. Petre Badulescu Lecture 1, International Economics

Lecture 1, International Economics International trade The Basics of World Trade A country’s trade balance is the difference between its total value of exports and its total value of imports (usually including both goods and services). A country has a trade deficit (surplus) if its imports (exports) exceeds its exports (imports). The bilateral trade balance is the difference of exports and imports between two countries. Current trade statistics for Sweden: National Board Of Trade – Kommerskollegium, i.e. Sweden’s Authority for foreign trade and trade policy, has on its homepage very useful information about trade and trade policy. See e.g. their trade policy ABC (primer) or current statistics over how Sweden’s foreign trade has been developed in the economic crisis’s footmarks. Homepage address: www.kommers.se Current trade statistics for Sweden Dr. Petre Badulescu Lecture 1, International Economics

Lecture 1, International Economics APPLICATION Slides 8 - 26, (F&T, Chapter 1) Is Trade Today Different from the Past? Map of World Trade Migration and Foreign Direct Investment Slides 27 - 41, (F&T, Chapter 1) Map of Migration The export shares of foods, feeds, and beverages and industrial supplies have fallen from 80% in 1925 to 40% in 2009. Exports of capital plus consumer goods plus automobiles have increased from 20% in 1925 to more than 60% in 2009. Dr. Petre Badulescu Lecture 1, International Economics