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Introduction Land area and population Income Income per capita International trade

International Trade & the World Economy;  Charles van Marrewijk. CHAPTER 1; THE WORLD ECONOMY. Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy

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Introduction Land area and population Income Income per capita International trade

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  1. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 1; THE WORLD ECONOMY Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions

  2. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 1; THE WORLD ECONOMY Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions

  3. International Trade & the World Economy;  Charles van Marrewijk Introduction • International economics distinguishes between: • International monetary analysis • International real analysis • International Trade & the World Economy focuses on real analysis. • Chapter 1 The World Economy discusses some key economic concepts, focusing on ‘important’ countries.

  4. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 1; THE WORLD ECONOMY Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions

  5. International Trade & the World Economy;  Charles van Marrewijk Land area and population

  6. International Trade & the World Economy;  Charles van Marrewijk Land area and population

  7. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 1; THE WORLD ECONOMY Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions

  8. International Trade & the World Economy;  Charles van Marrewijk Income • To measure the value of all goods and services we distinguish: • GDP = Gross Domestic Product (located in a country) • GNP = Gross National Product (residents of a country) • GDP + net receipts of factor income = GNP • To correct for the large differences in prices between countries (especially for non-traded goods and services) the United Nations International Comparison Project calculates: • Purchasing Power Parity exchange rates

  9. International Trade & the World Economy;  Charles van Marrewijk Income GNP and GDP

  10. International Trade & the World Economy;  Charles van Marrewijk Income

  11. International Trade & the World Economy;  Charles van Marrewijk Income • GNP in • current $ • and • PPP $

  12. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 1; THE WORLD ECONOMY Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions

  13. International Trade & the World Economy;  Charles van Marrewijk Income per capita

  14. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 1; THE WORLD ECONOMY Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions

  15. International Trade & the World Economy;  Charles van Marrewijk International trade

  16. International Trade & the World Economy;  Charles van Marrewijk International trade Exports relative to imports

  17. International Trade & the World Economy;  Charles van Marrewijk International trade The value of exports can exceed the level of GDP

  18. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 1; THE WORLD ECONOMY Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions

  19. International Trade & the World Economy;  Charles van Marrewijk The balance of payments

  20. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 1; THE WORLD ECONOMY Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions

  21. International Trade & the World Economy;  Charles van Marrewijk Dynamics and globalization Current account surplus (% of GDP) indicator of accumulation of financial claims on the Rest Of the World (ROW).

  22. International Trade & the World Economy;  Charles van Marrewijk Dynamics and globalization World GDP increases faster than world population

  23. International Trade & the World Economy;  Charles van Marrewijk Dynamics and globalization World exports increase faster than world GDP

  24. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 1; THE WORLD ECONOMY Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions

  25. International Trade & the World Economy;  Charles van Marrewijk Trade connections in the world economy

  26. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 1; THE WORLD ECONOMY Introduction Land area and population Income Income per capita International trade The balance of payments Dynamics and globalization Trade connections in the world economy Conclusions

  27. International Trade & the World Economy;  Charles van Marrewijk Conclusions • ‘Importance’ of countries varies with measure used: • Land area Russia, China, Canada • Population China, India, USA • GDP/GNP, current $ USA, Japan, Germany • GDP/GNP, PPP $ USA, China, Japan • Import/export USA, Germany, Japan/UK • Surplus current account = net capital outflow • GDP increases faster than population • Exports increase faster than GDP • Trade flows have local character • Trade flows mainly between high income countries

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