international economics.ppt

INTERNATIONAL ECONOMICS
Su Yu, School of Economics and Management
Shanghai Maritime University
Email: ******@.
Chapter 1: Introduction
Importance of international trade
Trade and national standard of living
The subject matter of international economics
Purpose of international trade theories and policies
Current international economic problem
and Methodology of the Text
Part 1: International Trade TheoryChapter 2: The Law parative Advantage
Introduction
The Mercantilists’ View on Trade
Trade Based on Absolute Advantage: Adam Smith
Trade Based parative Advantage: David Ricardo
Advantage and opportunity Cost
The basis for and the Gain from Trade under Constant Cost
Empirical Test of the Ricardian Model
Introduction
The earliest economic idea is engendered by the research on the international trade. It is so called Mercantilism.
The Mercantilists’ View on Trade
Charles II ‘s Story:
About 500 years ago, Charles II once asked a question to his financial officials that how England can get rid of its financial problem?
Richard’s answer:
There are no mine of gold and silver in England, all gold and silver were imported from foreign countries, if we can keep the situation that annually sell more goods to the foreign countries than buy goods from them, a favorite flow of gold and silver would be engendered in this case.
The Mercantilists’ View on Trade
The definition of the wealth: Gold and Silver
The way of getting wealth: Sell more Buy less.
Government policy: Intervention
Mercantilism
1400’s — 1700’s
The Mercantilists’ View on Trade
Earlier Mercantilist: William ·Stafford
Latter Mercantilist: Thomas ·Munn:
It is represented by his magnum opus: plaints, of Divers of Our Countrymen in These Our Days, written by W· S
It is represented by his magnum opus: England’s Treasure by foreign trade, written by Thomas· Munn
Evaluation to Mercantilism:
-Negative:
The idea