Economic integration
Chapter One.
The Economic integration all over the world flows through various vessels such as the international trade, which involves commercial and relations interactions between people from different countries, global finance capital, which includes investments from both foreign and short term capital portfolio, international economic production. The IMF, the WTO, and the World Bank are the major financial institutions that have immensely contributed to the growth of trade (James, 2018). Through the international migration of labor has contributed to the distribution of significant economic concepts globally. The global capital flows, such as financial flows, are devoted to reducing the currency fluctuations. Economists are pro-open trade because it encourages fast growth of countries. The statistical, empirical comparisons of states provide a picture of the existing economic environment.
Chapter 2
According economists define institutions as regulations that constraint and govern a specific behavior. Their exits two types of policies; fiscal policies and monetary policy. The fiscal policies are formulated by the executive and legislative arms of the government. Central banks formulate monetary policies. The Bretton Woods Conference, held in 1944, aimed at creating a more stable and sustainable world economy (James, 2018). The creation of the IMF and the world was one of the resolutions of this conference; the institution was created in 1944. The basic function of the IMF was to help create a stable world economy, free of crisis, and also formulate modes of money transfer between countries. The General Agreement on Tariffs and Trade was formulated to discuss trade rules and mechanisms for opening more international markets. Regional trade agreements can be multilateral, bilateral, and plurilateral. International institutions are essential because they provide public goods. Don't use plagiarised sources.Get your custom essay just from $11/page
Chapter 3.
Adam smith heavily criticized the school of thought, which he termed as mercantilism, which can also be called the politics of economics and nation-building. The mercantilists contributed by exporting the gold they earned they did not support imports because it could lead to exhaustion of the gold in the nation. The gold mined in the nation was used by the government to maintain its day to day activities such as paying debts that they awe other states and remunerating the armies and the natives as well. His argument communicated that he was against mercantilism; this is because, according to him, imports enabled the country to improve its standard of living; trade tends to expand the market and facilitates specialization of jobs, innovation. Eventually, it allows the creation of national wealth at large (James, 2018). Trade distractions lower the capacity of the market and end up limiting both specialization and innovation. We find that to economists have accepted and embraced this critique of trade barriers, this is because Smith found out that every state would be in a position to produce something at a cheaper price other countries by proper utilization of their locally available resources such as soil, mineral resources among other distinguishing factors.
Chapter 4.
The Ohlin Trade Model is a model with bread and steel that assumes the same procedural method that steel requires more capital per unit than bread does. Heckscher-Ohlin is another trade model that can be used to predict exports. According to this model, the U.S. should export goods such as agricultural goods and technology, which are capital intensive (James, 2018). The various tests of Ricardian theory give precise results when used to predict export patterns. According to the income distribution impacts on trade, trade moves the state economy depending on the PPC. In the short run, the income distribution may be stuck according to the HO model
Chapter 6
There are three factors of production, and they include capital, technology, and labor. Tariffs are imposed on imported goods, while quotas are put in place to restrict the amount of goods that can be imported at a given period. Resource allocation and income distribution impacts the production and consumption of goods. Imposing tariffs leads to various impacts, for example, the rival countries may issue retaliatory measures (James, 2018). Firms spend a lot of resources seeking protection rather than in increasing productivity. Tariffs are common in poor counties because the governments in those countries rely on them to raise revenue. Agricultural products, textiles and apparel manufacturing companies are mostly affected by such tariffs.
Chapter 8
The concept of interdependence plays a key role in sustainability context. This is through a proper combination of ecological and social economic systems. Various trade policies formulated are acting as the greatest barriers. Different nations have put in place different trade standards which unintentionally barred cross-border trade. Such diverse trade standards have led to several conflicts. There are three options of setting and recognizing standards in the labor environment and they include harmonizing standards, separate standards and mutual recognition of standards (James, 2018). A sustainable business environment must guarantee the future generations a stable economy. Setting standards in the labor environment is determined by the economic stability of the given country. According to the UN International Labor Organization as set various standards that aims at protecting workers from exploitation.