Reading 19 : International Trade and Capital Flows

Reading 19

International Trade and Capital Flows

(국제 무역 및 자본 이동)

 

Module 19.1 : International Trade Benefits

 

LOS 19.a

: Compare gross domestic product and gross national product (GDP와 GNP의 비교)

 

Gross domestic product(GDP) is the total value of goods and services produced within a country's borders. Gross national product(GNP) measures the total value of goods and services produced by the labor and capital supplied by a country's citizens, regardless of where the production takes place.

 

GDP는 국내에서 생산되는 모든 것을 측정

GNP는 국민이 해외에서 벌어들인 소득을 포함시키는 개념

 

LOS 19.b

: Describe benefits and costs of international trade(국제 무역의 이점과 비용을 설명)

 

Free trade among countries increases overall economic welfare. Countries can benefit from trade because one country can specialize in the production of an export good and benefit from economies of scale Economic welfare can also be increased by greater product variety, more competition, and a more efficient allocation of resources.

 

Costs of free trade are primarily losses to those in domestic industries that lose business to foreign competition, especially less efficient producers who leave an industry. While other domestic industries will benefit from freer trade policies, unemployment may increase over the period in which workers are retrained for jobs in the expanding industries. Some argue that greater income inequality may result, but overall the gains from liberalization of trade policies are thought to exceed the costs, so that the winners could conceivably compensate the losers and still be better off.

 

전체적으로 무역으로 인한 손실보다 이점이 더 크다.

 

LOS 19.c

: Distinguish between comparative advantage and absolute advantage(비교우위와 절대우위)

 

A country is said to have an absolute advantage in the production of a good if it can produce the good at lower cost in terms of resources relative to another country. A country is said to have a comparative advantage in the production of a good if its opportunity cost in terms of other goods that could be produced instead is lower than that of another country.

 

절대우위가 어떤지와 관계없이, 비교우위는 항상 존재하므로 기회비용이 낮은 생산물을 집중 생산하여 무역하게 되면 항상 Total output이 증가하게 된다.

 

한 국가의 생산가능곡선(Production Possibility Frontier)의 기울기는 기회비용을 나타냄.

X축 한 단위 당 포기해야하는 Y축 생산물의 양을 기울기 값이 의미하는 바임

 

LOS 19.d

: Compare the Ricardian and Heckscher-Ohlin models of trade and the source of comparative advantage in each model (리카르도의 모델과 헥셔-올린 모델 비교, 각 모델의 비교우위를 만들어내는 원천 비교)

 

The Ricardian model of trade has only one factor of production-labor. The source of differences in production costs and comparative advantage in Ricardo's model is differences in labor productivity due to differences in technology.

Heckscher and Ohlin presented a model in which there are two factors of production capital and labor. The source of comparative advantage (differences in opportunity costs) in this model is differences in the relative amounts of each factor that countries possess.

 

헥셔-올린 모델 결론:

자본 풍부국 -> 자본집약상품에 비교우위 -> 전문화 -> 자본수요증가-> 이자 비용 증가

노동 풍부국 -> 노동집약상품에 비교우위 -> 전문화 -> 노동수요증가-> 임금 비용 증가

 

Module 19.2 : Trade Restrictions

 

LOS 19.e

: Compare types of trade and capital restrictions and their economic implications. (무역 및 자본 규제의 타입과 경제에 대한 영향)

Types of trade restrictions include:

Tariffs : Taxes on imported good collected by the government.

Quotas: Limits on the amount of imports allowed over some period.

Minimum domestic content: Requirement that some percentage of product content must be from the domestic country.

Voluntary export restraints: A country voluntarily restricts the amount of a that can be exported, often in the hope of avoiding tariffs or quotas imposed

their trading partners.

 

무역 규제를 찬성하는 이유

-     Infant industry (유치산업)이 국제적 경쟁력을 갖추도록 보호

-     National security (국방) 

All of these restrictions will tend to:

Increase prices of imports and decrease quantities of imports. Increase demand for and quantity supplied of domestically produced goods. Increase producer's surplus and decrease consumer surplus.

결론적으로, 무역규제는 국가 경제에 있어서 DWL(자중손실)을 발생시킴.

소비자의 후생손실 > 생산자 후생증가 + 관세,Quotas rents

 

Restrictions on the flow of financial capital across borders include outright prohibition of investment in the domestic country by foreigners, prohibition of or taxes on the income earned on foreign investments by domestic citizens, prohibition of foreign investment in certain domestic industries, and restrictions on repatriation of earnings of foreign entities operating in a country.

 

LOS 19.f

:  Explain motivations for and advantages of trading blocs, common markets, and economic unions.(무역지대, 공동시장, 경제동맹 형성의 이점과 동기설명)

 

Trading blocs or regional trading agreements(RTA)를 통합의 정도에 따라 아래와 같이 부름. 아래로 갈수록 통합의 정도가 강해지고 이전의 통합 내용을 포함한다.

Free trade area(FTA): All barriers to the import and export of goods and services among member countries are removed. - NAFTA

Customs union(관세동맹): Member countries also adopt a common set of trade restrictions with non-members.

Common market(공동시장): Member countries also remove all barriers to the movement of labor and capital goods among members.

Economic union(경제연합): Member countries also establish common institutions and economic policy for the union - EU

Monetary union(단일화폐권): Member countries also adopt a single currency.

Euro-zone

 

 

LOS 19.g

: Describe common objectives of capital restrictions impose by governments.(정부의 자본규제 목적)

 

Reducing the volatility of domestic asset prices.

Maintaining fixed exchange rates.

Keeping domestic interest rates low and enabling greater independence regarding monetary policy.

Protecting strategic industries from foreign ownership.

 

LOS 19.h

: Describe the balance of payments accounts including their components(국제수지의 요소 설명)

The balance of payments(BOP) refers to the fact that increases in a country's assets and decreases in its liabilities must equal (balance with) decreases in its assets and increases in its liabilities.

 

국제수지 = 경상수지 + 자본수지 + 금융수지

경상수지(무역수지) = 상품수지 + 서비스수지 + 소득수지 + 경상이전수지

자본수지 = 자본이전 + 비금융자산매매

금융수지 = 정부가 보유한 해외자산 + 일반금융기업이 보유한 해외자산

 

The current account(경상수지) includes imports and exports of merchandise and services(상품+서비스 수지), foreign income(소득수지) from dividends on stock holdings and interest on debt securities, and unilateral transfers(경상이전수지) such as money received from those working abroad and direct foreign aid.

 

The capital account(자본수지) includes debt forgiveness, assets that migrants bring to or take away from a country, transfer(자본이전) of funds for the purchase or sale of fixed assets, and purchases of non-financial assets(비금융자산매매), including rights to natural resources, patents, copyrights, trademarks, franchises, and lcases.

 

The financial account(금융수지) includes government-owned assets abroad(정부보유해외자산) such as gold, foreign currencies and securities, and direct foreign investment and claims against foreign banks. The financial account also includes foreign-owned assets in the country, domestic government and corporate securities, direct investment in the domestic country, and domestic country currency.

 

Overall, any surplus (deficit) in the current account must be offset by a deficit (surplus) in the capital and financial accounts.

국제수지는 균형을 이뤄야 함.

 

LOS 19.i

: Explain how decisions by consumers, firms, and governments affect the balance of payments (소비자, 기업, 정부의 결정이 국제수지에 미치는 영향 설명)

 

 In equilibrium, we have the relationship:

X - M = Total savings(private savings + government savings) - domestic investment

 

When total savings is less than domestic investment, exports must be less than imports so that there is a deficit in the current account.

Lower levels of private saving, larger government deficits, and high rates of domestic investment all tend to result in or increase a current account deficit. The intuition here is that low private or government savings in relation to private investment in domestic capital requires foreign investment(Capital acccounts surplus) in domestic capital.

경상수지 적자 = 자본수지 흑자(해외에서 돈을 빌려옴)

LOS 19.j

: Describe functions and objectives of the international organizations that facilitate trade, including the World Bank, the International Monetary Fund, and the World Trade Organization. (WB, IMF, WTO 등 국제 무역 관련 국제 기구의 역할과 목적 설명)

 

The International Monetary Fund(IMF) facilitates trade by promoting international monetary cooperation and exchange rate stability, assists in setting up international payments systems, and makes resources available to member countries with balance of payments problems.

-     회원국 간 돈 빌려쓰기 원활하게 함

 

The World Bank(WB) provides low-interest loans, interest-free credits, and grants to developing countries for many specific purposes. It also provides resources and knowledge and helps form private/public partnerships with the overall goal of fighting poverty

-     저개발국가에 자금지원활동

 

The World Trade Organization(WTO) has the goal of ensuring that trade flows freely and works smoothly. Its main focus is on instituting, interpreting, and enforcing a number of multilateral trade agreements that detail global trade policies for a large majority of the world's trading nations.

-국제 무역질서 확립을 위한 기구

 

 

출처 - Schweser note