11. Trade
is
almost
the
same
as
Innovation
quantity
of
goods
A
produced
quantity
of
goods
B
produced
The
production
Possibility
Frontier
12. What
image
do
you
have
about
Micro,
Macro
and
International
Economics
13. What
is
Economics?
! Economics is a study of mankind in
the ordinary business of life.(Alfred
Marshall)
! Economics is a study of how society
manages its resources.(N.Gregory
Mankiw)
! The science that deals with the
production,distribution,and
consumption of goods and services,or
the material welfare of mankind.
(Random House Dictionary)
14. MicroEconomics and MacroEconomics
! Microeconomics
! the study of how individual households and firms makedecisions
and how they interact with one another in markets.
! Macroeconomics:
! the study of economy as a whole. and economy wide phenomena
including inflation,unemployment,and economic growth.
Paul Krugman
John Forbes Nash
Amartya Sen
Ben Bernanke
John Maynard Keynes
Milton Friedman
15. Micro,
Macro
and
International
Economics
household
household
household
household
company
company
company
company
Microeocnomics
analyzes
the
behavior
of
consumer
and
company
Macroeconomics
analyzes
the
whole
economy
and
policy
for
stabilizing
the
economy
conducted
by
the
government
16. Microeconomics
versus
Macroeconomics
questions
Micro
Economics
! Should
I
go
to
business
school
or
take
a
job
right
now?
! What
determines
the
salary
offered
by
Citi
Bank
to
Cherie
Camajo,
a
new
MBA?
! What
determines
a
university
or
college
of
offering
a
new
course?
Macro
Economics
! How
many
people
employ
in
the
economy
as
a
whole
this
year?
! What
determines
the
over
roll
salary
levels
paid
to
workers
in
a
given
year?
! What
determines
the
overrall
level
of
prices
in
the
economy
as
a
whole?
17. Micro
and
Macro
Economics
household
household
household
household
company
company
company
company
Microeconomics
analyzes
the
behavior
of
consumer
and
company
Macroeconomics
analyzes
mechanism
of
the
whole
economy
and
the
policy
for
stabilizing
the
economy
conducted
by
the
government
19. Contents
! Part1
International
trade
theory
! Part2
International
trade
policy
! Part3
Exchange
rates
and
open
economy
macroeconomics
! Part4
International
macroeconomic
policy
20. Part1
International
trade
theory
! 2World
trade:
An
overview
! 3Labor
productivity
and
comparative
advantage:
The
Ricardian
model
! 4Specific
factors
and
income
distribution
! 5Resources
and
Trade:
The
Heckscher-‐Ohlin
Model
! 6The
Standard
trade
model
! 7External
Economies
of
scale
and
the
international
location
of
production
! 8Firms
in
the
global
economy:
Export
decisions,
outsourcing,
and
multinational
enterprises
21. Part2
International
trade
policy
! 9The
instruments
of
trade
policy
! 10The
political
economy
of
trade
policy
! 11Trade
policy
in
developing
countries
! 12Contriversies
in
trade
policy
22. Part3
Exchange
rates
and
open
economy
macroeconomics
! 13National
income
accounting
and
the
balance
of
payments
! 14Exchange
rates
and
the
foreign
exchange
market:
An
asset
approach
! 15Money
interest
rates,
and
exchange
rates
! 16Price
level
and
the
exchange
rate
in
the
long
run
! 17Output
and
the
exchange
rate
in
the
short
run
! 18Fixed
rates
and
foreign
exchange
intervention
23. Part4
International
macroeconomic
policy
! 19International
monetary
systems:
An
historical
overview
! 20Optimum
currency
area
and
the
European
experience
! 21Financial
globalization
:
opportunity
and
crisis
! 22Developing
countries
:
Growth,
crisis,
and
reform
24. Learning
Goals
in
Introduction
! Distinguish
between
international
and
domestic
economic
issues.
! Explain
why
seven
themes
recur
in
international
economics,
and
discuss
their
significance
! Distinguish
between
the
trade
and
monetary
aspects
of
international
economics
25. What
type
of
issues
can
you
image
regarding
international
economics?
26. 7
themes
recur
throughout
the
study
of
international
economics
1. The
gains
from
trade
2. The
pattern
of
trade
3. How
much
trade?
4. Balance
of
payments
5. Exchange
rate
determination
6. International
policy
coordination
7. The
international
capital
markets
27. 1.The
gains
from
trade
! 【Chap3】The
two
countries
can
trade
to
their
mutual
benefit.
! International
migration
and
international
borrowing
and
lending
are
also
forms
of
mutually
beneficial
trade
! 【Chap4】Labor
for
goods
and
services.
! 【Chap6】Current
goods
for
the
promise
of
future
goods.
! 【Chap21】International
exchanges
of
risky
assets
such
as
stocks
and
bonds.
! International
trade
may
hurt
particular
groups
within
nations.
! International
trade
will
have
strong
effects
on
the
distribution
income.
28. Ten Principles of Economics
from Mankiw
! Ⅰ.
How
People
Make
Decisions.
! 1:People
Face
Trade-‐offs.
! 2:The
Cost
of
Something
Is
What
You
Give
Up
to
Get
It.
! 3:Rational
People
Think
at
the
Margin.
! 4:People
Respond
to
Incentives.
! Ⅱ.
How
People
Interact.
! 5:Trade
Can
Make
Everyone
Better
Off.
! 6:Markets
Are
Usually
a
Good
way
to
Organize
Economic
Activity.
! 7:Governments
Can
Sometimes
Improve
Market
Outcomes.
! Ⅲ.
How
the
Economy
as
a
Whole
Works
! 8:A
Country's
Standard
of
Living
Depends
on
its
Ability
to
Produce
Goods
and
Services.
! 9:Prices
Rise
When
the
Government
Prints
Too
Much
Money.
! 10:Society
Faces
a
Short-‐Run
Trade-‐off
between
Inflation
and
Unemployment.
29. 2.The
pattern
of
trade
! Who
sells
what
to
whom?
! Climate
and
resources
clearly
explain
why
Brazil
exports
coffee
and
Saudi
Arabia
exports
oil.
! Why
does
Japan
exports
automobiles,
while
the
United
States
exports
aircraft?
! One
of
the
most
influential
explanations
links
trade
patterns
to
an
interaction
between
the
relative
supplies
of
national
resources
such
as
capital,
labor,
and
land
on
one
side
and
the
relative
use
of
these
factors
in
the
production
of
different
goods
on
the
other.
30. Theories
in
the
pattern
of
trade
! 【Chap2】The
trade
between
any
two
countries
is
proportial
to
the
products
of
their
GDP
and
diminishes
with
distance.
! 【Chap3】International
differences
in
labor
productivity.
! 【Chap5】Interaction
between
the
relative
supplies
of
national
resources
and
the
relative
use
of
these
factors
in
the
production
of
different
goods
on
the
other.
! 【Chap7&8】Substantial
random
components
in
the
pattern
of
international
trade.
31. 3.How
much
trade?
! The
seemingly
eternal
debate
over
how
much
trade
allow
is
the
most
important
policy
theme.
-‐100
-‐80
-‐60
-‐40
-‐20
0
20
40
60
80
100
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
exports
import
net
exports
(Trillion
yen)
32. Imports
of
goods
and
services
(%
of
GDP)
16
18
27
34
54
54
182
0
20
40
60
80
100
120
140
160
180
200
Japan
U.S
China
United
Kingdom
Germany
Korea
Singapore
(Source)The
world
Bank
http://data.worldbank.org/indicator/NE.IMP.GNFS.ZS
%
33. Trade
policy
! 【Chap4
and
5】Strong
effects
on
income
distribution
within
countries
of
trade.
! 【Chap9
and
10】A
analytical
framework
for
determining
the
effects
of
government
policies
that
affect
international
trade.
! 【Chap10
and
Chap12】The
relative
power
of
different
interest
groups
within
countries
is
often
the
main
determining
factors
in
government
policies
toward
international
trade.
34. 4.Balance
of
payments
! The
issue
of
a
countries
balance
of
payments
emerges
in
a
variety
of
specific
contexts.
! 【Chap8】In
discussing
foreign
direct
investment
by
multinational
corporations.
! 【Chap13】In
relating
international
transactions
to
national
income
accounting.
! 【Chap17
through
22】In
discussing
virtually
every
aspect
of
international
monetary
policy.
35. 5.Exchange
rate
determination
! 【Chap14-‐17】Focusing
on
the
modern
theory
of
floating
exchange
rates.
! 【Chap18】The
working
of
fixed-‐rate
systems.
! 【Chap19】The
historical
performance
of
alternative
exchange-‐rate
systems.
! 【Chap20】The
economics
of
currency
areas
such
as
the
European
monetary
union.
36. 6.International
policy
coordination
! 【Chap9】Discussing
the
Rationale
for
an
international
treaty
such
as
GATT
and
WTO
and
looking
at
whether
the
current
rule
of
the
game
for
international
trade
in
the
world
economy
can
or
should
survive.
! 【Chap19】The
theory
of
international
macroeconomic
condition
and
the
developing
experience.
37. 7.Internatinal
Capital
Markets
! Some
special
risks
are
associated
with
international
capital
markets.
! Currency
fluctuations
! National
default
! The
growing
importance
of
international
capital
markets
and
their
new
problems
demand
greater
attention
than
ever
before
! 【Chap21】The
functioning
of
global
asset
markets
! 【Chap22】Foreign
borrowing
by
developing
countries
38. Trade
and
Money
focus
Trade(Part1&2)
Money(Part3&4)
issue
The
real
transactions
(a
physical
movements
of
goods
and
tangible
commitment
of
economic
resources)
The
financial
transactions
(such
as
foreign
purchase
of
U.S
dollars)
The
conflict
between
US
and
Europe
over
Europe’s
subsidized
exports
of
agriculture
products.
The
dispute
over
whether
the
foreign
exchange
value
of
the
dollar
should
be
allowed
to
float
freely
or
be
stabilized
by
government
action.
40. 7
themes
recur
throughout
the
study
of
international
economics
1. The
gains
from
trade
2. The
pattern
of
trade
3. How
much
trade?
4. Balance
of
payments
5. Exchange
rate
determination
6. International
policy
coordination
7. The
international
capital
markets
