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International Trade and Finance for Global
LogisticsMAGL 570
Fall 2010
Steven Yamarik
I. Introduction
What we will be learning?
This course examines the role of international trade and finance in the world economy.
We take a global view of the economic processes, structures and policies that shape the world economy.
We examine the world product, labor, capital and currency markets.
I. Introduction
A. History of the World Economy
1. First Wave of Globalization: 1870-1914
a. Declining transportation costs and lower tariff rates result in greater trade.
b. Open borders result in greater immigration.
I. Introduction
A. History of the World Economy
2. Second Wave of Globalization: 1945-80
a. Declining transportation costs and lower tariff rates result in greater trade.
b. Developed economies specialize in manufacturing production.
I. Introduction
A. History of the World Economy
2. Third Wave of Globalization: 1990-
a. Removal of trade barriers in the developing countries result in greater trade for developing nations.
b. Removal of capital controls result in greater capital flows.
a. Removal of trade barriers in the developing world …
Openness in the World (Sachs-Warner criteria)
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
1950 1955 1960 1965 1970 1975 1980 1985 1990
share
2000
I. Introduction
I. Introduction
a. … result in greater trade in developing nations. World Trade (% of GDP)
0
10
20
30
40
50
60
1960 1965 1970 1975 1980 1985 1990 1995 2000
All Nations Developing Nations
I. Introduction
B. The Current State of the World Economy
3. A Tale of Two Policies
a. The U.S. is pursuing an expansionary monetary policy and neutral fiscal.
Fiscal stimulus and likely tax cuts
Quantitative Easing II (QE2)
I. Introduction
B. The Current State of the World Economy
3. A Tale of Two Policies
b. Europe is pursuing a contractionary fiscal policy.
Fiscal consolidation in U.K., Ireland, Portugal, Spain and Greece