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Agricultural Trade in the broader global context

Lecture 4- AHEED Course “International Agricultural Trade and Policy” Taught by Alex F. McCalla, Professor Emeritus, UC Davis. March 31 ,2010, University of Tirana, Albania. Agricultural Trade in the broader global context. Trade and Growth –Positive Relationship. Financial Crisis.

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Agricultural Trade in the broader global context

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  1. Lecture 4- AHEED Course “International Agricultural Trade and Policy” Taught by Alex F. McCalla, Professor Emeritus, UC Davis. March 31 ,2010, University of Tirana, Albania Agricultural Trade in the broader global context

  2. Trade and Growth –Positive Relationship

  3. Financial Crisis • US, EU, China & Japan account for 50% of global GDP; 70% of global financial flows; & 2/3rds of global saving. • Because of integrated financial markets, the banking problems in US spread quickly to Europe • But China & Japan were not directly exposed to the toxic assets originating in the US • Instead, the collapse of world trade hit the export-oriented economies of China & Japan

  4. GDP Growth Rates Head South % Real Economic Growth Emerging 5.9% World 3.5% Advanced 1.7% source: http://imf.org/external/datamapper/index.php

  5. US Growth Goes Negative

  6. China Slows But Stays Above 6%

  7. China’s GDP by Expenditure (2007) China’s growth very important for world economy Source: CEIC

  8. Savings Rates Widely Different

  9. India Doing Well

  10. Brazil More Unstable

  11. Russia- Steady Growth then 0ff the Table

  12. World Real GDP Growth vs Trade Volume in Goods & Services Trade GDP source: http://imf.org/external/datamapper/index.php

  13. U.S. Current Account Balance Million $ GDP= C + I + G + (X – M) GDP (Prodn) - (X-M) (trade bal.) = C + I + G (absorption) Source: US Bureau of Economic Analysis

  14. US Dollar Index Source http://www.fxstreet.com/rates-charts/usdollar-index/

  15. Recovery –when, how fast • There seems to be an emerging consensus that we have reached the bottom although unemployment remains high in advanced countries. • All agree it will happen first in middle income developing countries eg China, Brazil, next in other developing countries, last in advanced countries. • Most agree that will be slow recovery in countries like US where everybody’s confidence has been shattered. Savings rates in G7 will probably rise meaning resumption of consumer spending will be delayed. • Implications for agricultural trade are not clear especially given the recent price spike in commodity prices, the topic of next lecture. • More when we review Economist”sprojections in last lecture.

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