국제무역 용어 영어정리

1.how opening up an economy to international trade may affect its rate of growth?
what empirical evidence is there to support this suggested relationship?

1.assumptions
=*consumption good(C) is the exportable and the investment good(I) the importable
*two factors(K,N), two traded goods(M,X), and two final goods(I,C) for output(Y)
*the growth rate of labour is given exogeneously
*no technical progress
*savings propensity is given
*at the initial time, the rate of growth of capital is greater than growth rate of labor
*constant-return-to-scale production function with continuous substitution between
inputs
*BOP equilibrium, full employment
*factor intensities do not differ between M and X ===> specialize in X after trade
*the rest of the world is already in its steady state
*investment is brought into equality with savings
2.analysis
*in the close economy, with capital growing faster than labour and hence output growing
more slowly than capital, the growth rate of output-capital ratio would fall steadily
until it approaches the given labour growth rate.(steady state growth rate)
*The opening-up of trade has shifted outwards the economy's 'absorption-possibility'
frontier
*effect on the growth rate
:(1)the impact effect = raise the growth rate temporarily
(2)the capital accumulation effect = With a constant savings propensity, some part of
the permanent rise in real income or absorption will then be saved and invested.
When economy is opened, with the capital-labour ratio steadily rising, and hence
the output-capital ratio steadily falling, the economy will tend to the steady
state, this time moving not from the same growth rate at the closed economy but
from the higher growth rate.
(3)In the closed economy Y/N would rise, with capital growing faster than labour, output
would also be growing faster than labour.
First,opening-up economy will have impact effect of jumping up real income or
absorption, causing Y/N increase. After that Y/N will have different jumped-up
path than before as time goes on.This time path of growing static gains over time
will be reinforced by the change of factor intensity, improvement of terms of
trade, capital accumulation effect, economies of scale, etc. And here we must
allow for the effect of the opening up trade raising the rate of capital
accumulation, which raises the rate of growth above what it would be otherwise.
And because opening-up trade lowers the domestic prices of importables relative
to the prices of exportables, if investment goods are M intensive, so that the
relative price of I falls, this has more effects on capital accumulation. One
more time this situation is going to be better by the improved terms of trade. So
for any given Y/K, the capital growth rate is higher than before. This higher
growth rate of capital will put up with it the rate of growth of output.
All of these guarantee that the higher steady-state income per head is explained
by the higher growth gain from trade explained in turn by the higher growth up to
the steady state.

I think that NICs cases could be the empirical evidence for this relationship.
And especially outward-oriented countries have taken the higher growth rate than
inward-oriented countries. Futhermore, a lot of worlwide research papers show that there
is a positive relationship between growth rate of trade and GNP growth rate.

2.(a)key concerns of enviornmental groups that involves trade policy?

1.economic growth and enviornment
Enviornmental groups believe that trade is contributing to pollution around the world by
facilitating more production, and consumption. And they believe that the orthodox model
of free trade does not have concerns on externalities such as damage from pollution, and
long-term ressource depletion. So economic growth constitutes a threat to the
enviornment. They claim that the present trade policy, which is based on the
orthodox model of free trade and aimed only at economic growth, should be
reconsidered. Therefore government policies such as pollution or resource depletion
taxes, eco-dumping taxes, etc., are appropriate for these remedy.
2.trade liberalization and enviornmental degradation
Enviornmentalists argue that if production or consumption of a commodity is
pollutive,the expansion of output resulting from liberalization of trade in the absence
of pollution taxes and the use of less pollutive technologies leads to increased
enviornmental degradation.
3.world-widening enviornmental standards
Therefore they claim that it is urgent to have worldwide enviornmental standards or
regulations. So the powerful organization like UN or WTO should do their best to
reinfore, encourage, and monitor enviornmental regulations.

(b)what worries supporters of a liberal trading order about the use of trade policy for
enviornmental purposes?

They believe and worry the following:
1.enviornmental standards and international competitiveness or free trade equals unfair
trade:
Differences in enviornmental regulations caused by using eco-taxes create differences in
international competitiveness. Or unilateral imposition of enviornmental regulations by
the enviornmentally rich country will erode price advantage over the producers in
enviornmentally scarce country.
And they worry about the misuse of enviornmental standands for competitiveness by the
powerful enviornmentally rich countries. Therefore what is important for them is not a
enviornmental regulation but a hidden objective.
2.industrial flight hypothesis or pollution heaven hypothesis
They claim that multinational firms shift their operations to developing countries
because of the high costs resulting from enviornmental regulations imposed on them in
their own countries.
3.imposing ethical preferences on others
Behind the enviornmental argument against free trade is also a desire to impose one's
ethical preferences on other communities and nations. So unilateral government
imposition of enviornmental standards against other nations in order to get them accept
enviornmental preferences is objectable.

(c)what are the options available to resolve trade and enviornmental conflicts?

Both groups differ in their method but have the same concerns of maximizing global
welfare. So after recognizing the limit of trade theory and limited role of trade policy
interventions in addressing enviornmental problems, harmonization of enviornmental
standards in worldwide range in the context of WTO rules can be the second-best option.
Anyway the best solution is in international cooperation.

3.show the adverse effect of the liberalization of the current account and the capital
account. comment on the appropriate order of liberalization.

Three-good-two-factor Model
1.assumptions
:*no capital accumulation--all funds obtained from abroad are used to increase present
consumption
*three goods(exportables=X, importables=M, nontradables=N)
two factors(capital, labour)
=in short run capital is sector-specific, with labour being perfectly mobile between
the three sectors
*labour Mrt: free of market distortions
*domestic capital Mrt: free of mrt distortions
*importables have the highest capital-labour ratio
*there is no initial inflation
*the only trade restriction is tariff
*exchange rate is fixed to 1
*prior to the opening of the capital accout, the domestic rate of time preferences
exceeds the world rate of interest

2.analysis
=under case 1((K/L)x < (K/L)n < (K/L)m); figure 7.3

*long-run effect of current account liberalization
: the reduction of the tariff will generate an increase in the wage rate relative to the
rental rate, because this country is assumed to have comparative advantage on labor
intensive exportables, so after liberalization this country will specialize in labour
intensive exportables just like known as Stolper-Samuelson theorem, which means all
three sectors become more capital intensive, if demand for nontradables is not changed
after liberalization.
=>@production of exportables will expand, which means resources moving into the
exportable sector
@production of importable will decline, meaning of resources moving out of the
importable sector
@wages, relative to all goods, will increase
@the rental rate of capital, relative to all goods, will decrease

*long-run effect of capital account liberalization
: relative prices of the three goods are completely given by world prices, technology, and
the tariff.Therefore the opening of the capital account will have no long-run effect on
relative prices of goods or factors. But the extent that a fraction of the new funds
obtained from abroad are used to finance a higher consumption of nontradables, the
production of these goods will increase. Production of the two tradables goods will have
to decline because of resources and factors allocation.
=> @production of importables will decrease, with capital and labour moving out of this
sector
@production of exportables will decrease
@prices of goods and factors will not be altered

3.Conclusions
While the current account liberalization will result in resources moving into the
exportables sector, the opening of the capital account will result in resources moving out
of that sactor.

*Comment
In the real world, there are adjustment cost, market distortions and imperfections.
While theoretically it is thought that capital account adjusts faster and the current
account liberalization is recommended first, evidences in the real world don't support
this. The order of liberalization could be reversed in the real world.
So policy-makers should be careful when they are intended to minimize the unwanted price
and resource movements during capital accounts and current accounts liberalization,
because liberalization of these accounts have the adverse effect.

4. Why should expand S-S trade? What main features? What difficulties in expanding it?

Why;
The dialogue between developed countries and LDCs is increasingly becoming purposeless. So
what are needed now is a new international economic order encouraging the expansion of
trade among countries, which is encouraging South-South trade.
There is a lot of reasons why they want to expand S-S trade.
Developing countries feel the followings.
1.asymmetries in the distribution of grains from N-S trade
2.the slowdown of growth in the developed countries as an engine of growth for LDCs
If LDCs want to maintain about 6% growth rate in their economy, it is impossible because
the engine of growth for LDCs by developed countries is growing at the speed of below 4%.
3.the growth of the new protectionism such as non-tariff barriers, anti-dumping, etc. in
developed countries means for LDCs that they have to find new engine of growth
4.many LDCs do not have comparative advantage in any good in trade with developed
countries, so better to turn to trade among themselves
5.SST will promote southern self-reliance
And theoretically it possible for LDCs to expand S-S trade, because dissimilarity such as
personnal income, GDP, technology, etc. between themselve can motivate interindustry
specialization and similarity such as preference between themselves also can stimulate
intraindustry specialization.
Here are the 4 overlapping flows constitu the present trade among LDCs.
1.manufactured goods; NICs play the major role in this
2.petrolem; About half of total value of S-S trade exports comes
3.primary products; Mainly imported by resource-poor NICs and oil exporting countries
4.neighboring trade
Considering all of these, still the level of S-S trade is not satisfactory.
The main difficulties faced by S-S trade between LDCs are
1.when we compare with those of developed countries, lack of sufficient social
infrastracture such as transport, credit and information link between themselves, caused
from historic reason.
Because of infrastructure constraints, the existing level of SST is less than optimal.
2.northern monopolies, controlling trade in primary commodities
Northern monopolies reduce Southern gains and it is difficult for LDCs to trade between
themselves without Northern monopolies.
3.political reason, which is caused from reluctance to surrender sovereigty to external
power
4.absence of a strong unbiased administrative system to encourage SST
There are political and administrative difficulties in organizing preferential trading
arrangements among LDCs and then discussing the economic problems.
5.unfair distribution of the gains between themselves
The less developed members of LDCs feel that the more developed members are gaining
more. Therefore the question of which countries have received the greatest stimulus to
growth arises.
In spite of these difficulties, I think that SST will be extended more like NNT.
And the potential gains are likely to be greater if this process is allowed to evolve
freely in a multinational setting.

5.(a)cost of protection associated with an inward-oriented trade policy?

We can divide the cost of protection in this case 3 catagories.
First, there is the static cost of protection.
When the government impose protective measures, it causes inefficient resource allocation
, derived from distortions in the relative prices of inputs and outputs. This happen
because the resources are attracted to protected industries at the expense of other
industries.
Second,there are the dynamic costs of protection
In LDCs engaged in an inward-oriented trade policy, protection is not temporary. At first
this kind of protection was used in line with protection for infant industry.
But when this kind of protection is not eliminated, which is as often the case, the
continued sheltering of domestic industry from foreign competition involves a dynamic
cost. Those are no improvement in producing method or technology, no economies of scale,
and no productive improvement.
Third, there are costs on exporters.
In the process of government imposition of protective measures in imports, exchange rate
might be appreciated. And then overappreciated exhange rate cause impediment for expoters.
And protection increases in the costs of imported inputs for exporters. So, causing higher
price for exporters, it is going to be a handicap for exporters to compete with the other
exporters from other countries. And high protection increases in costs of living, which
pushs for higher labour costs for exporters and other sectors.
And finally, prolonged protection in imports make fall in exports from other countries.
What this process means is fall in other countries' ability to import and reduced demand
for the exports from the country. Mainly this international repercussions arises from the
policy of beggar-thy-neighbor effects. Therefore there can be also be retaliation from
other countries, which causes trade warfare.

(b)major issues involved in any attempt at trade liberalization?
suggestions for improving the effectiveness of trade reform?

Trade liberalization is a move toward neutrality, which means no discernible incentives
to either the importable or the exportable activities of the economy. But there are 4 main
issues involved in any attempt of trade liberalization.
Those are:
1.speed of implementation
It is believed that one stage radical policies are expected to be more credible and
would be the best. But it is needed to control the speed of implementaton because trade
liberalization is to sure displace factors(capital and labour) for production.
2.major elements of a trade reform
There are a lot of elements of trade reform(tariff reduction, tariff unification,
relaxing quantatative restrictions, and export subsidies). So it should be careful to
use these respective methods, because these elements have different influences on trade
liberalization.
3.circumstances
Often liberalizations have been introduced 'under distress'.
To avoid high inflation, BOP crisis, exogeneous shocks, a change in political regime,
etc. afer trade liberalization, government should recognize the situation and
circumstances before and afer policies.
4.trade liberalization and other economic policies
Trade liberalization should be undertaken in conjunction with changes in other policies.
After considering all of these, the following liberalization conditions are recommendable.
The followings should be pre-conditions for improving effectiveness of trade reform.
Government should avoid overvaluation when using exchange rate policy, and take
sufficiently selective infant industries, and make external credit be used only for
investment and importing technology. Using these policies carefully might be helpful.
First of all it is very important to consdier structural adjustment costs after trade
liberalization.

6.the problems and challenges faced by developing countries at present in their efforts to
adop an export-oriented strategy.
What options do they have to face these problems?

There are a lot of problems and challenges faced by them. But we can summarize them in 3
catagories.
First one is increase in protectionism in industrial countries. What this is meaning is
that their efforts to promote export is at stake because of more difficulties to get
access to market demand in industrial countries. So they are loosing their engine of
growth.
In this case, what could be the option is S-S trade. LDCs can seek their exit for
maintaining growth rate and promotion for export through this S-S trade.
Second one is regionalism which is growing more widely and faster.
Growing regionalism can cause trade diversion, beggar-thy-neighbor effects and trade
warfare. The major losers in this battle of regionalism are developing countries.
It can be thought that wider-spreading regionalism is another aspect of protectionism.
Therefore growing regionalism is shutting down market accessibility for LDCs, too.
Third one is how to keep alive multinationalism.
First-best atmosphere for their policy is worlwide free trade, that is multinationalism.
But the situation for their policy is not favorable, because of growing regionalism.
So their effort should lie on promotion multinationalism around WTO. When they do this,
they can avoid the direct pressure on them in the form of protectionism for their
exportables.
And promoting trade in services that they might have comparative advantage compared to
industrial countries, such as construction service, computer software, transportation
service, etc. is the useful method to avoid problems and challenges faced by them.