1) The document discusses how external economies of scale can lead to international trade even when countries have identical production possibilities. With external economies, the production possibilities frontier becomes convex, allowing for gains from specialization and trade.
2) It explains that external economies occur when industry-wide costs decrease as industry size increases, due to factors like specialized suppliers. This can result in one country dominating production of a good globally due to lower costs.
3) The document notes that established industries, even if not the most efficient, may remain dominant due to network effects from their head start, illustrating path dependence in trade patterns from external economies.
Trade policies in developing countries have been central to the analysis of international development economists over the past decades. The desire for rapid economic growth in developing countries has raised many questions about the relationship between trade and growth. This PPT examines the fact that the policies adopted in many developing countries have often been very different from those emanating from rational allocation models and have provided researchers/ students with a wide scope for analyzing their effects.
Trade policies in developing countries have been central to the analysis of international development economists over the past decades. The desire for rapid economic growth in developing countries has raised many questions about the relationship between trade and growth. This PPT examines the fact that the policies adopted in many developing countries have often been very different from those emanating from rational allocation models and have provided researchers/ students with a wide scope for analyzing their effects.
College of Businesswww.derby.ac.ukbusinessSensitivity WilheminaRossi174
College of Business
www.derby.ac.uk/business
Sensitivity: Internal
Marketing across Cultures
Week 4
College of Business
www.derby.ac.uk/business
Sensitivity: Internal
WHY DO WE TRADE
INTERNATIONALLY?
College of Business
www.derby.ac.uk/business
Sensitivity: Internal
• Cost-Benefit exchange
• Today’s links were formed
in the 18th/19th centuries
• Key reasons for
international trade:
• - the theory of
comparative advantage
• - the international
product life cycle
College of Business
www.derby.ac.uk/business
Sensitivity: Internal
Suggests trade takes place between countries because one country can
produce at lower price than elsewhere.
Example:
Japan (e.g. Hitachi, Sony) – domination of the European TV market due
to a strategy of:
• Better product quality and design
• Lower prices due to economies of scale and superior
manufacturing technology
Reasons Countries Trade – the theory
of comparative advantage (Ricardo)
College of Business
www.derby.ac.uk/business
Sensitivity: Internal
• Sustained period of investment in the organisation may lead to
lower operating costs
• Lower labour costs – by locating operations in a newly
industrialised economy (NIE)
• Proximity to raw materials –low inventory and logistics costs
• Subsidies to help native industries
How to Achieve Comparative Advantage?
College of Business
www.derby.ac.uk/business
Sensitivity: Internal
College of Business
www.derby.ac.uk/business
Sensitivity: Internal
College of Business
www.derby.ac.uk/business
Sensitivity: Internal
PRODUCT LIFE CYCLE
College of Business
www.derby.ac.uk/business
Sensitivity: Internal
INTERNATIONAL PRODUCT LIFE CYCLE
College of Business
www.derby.ac.uk/business
Sensitivity: Internal
1. US firms manufacture for home market and start to export
2. Foreign companies begin to manufacture
3. US exports decline
4. Foreign company begins exporting to USA; directly competing.
College of Business
www.derby.ac.uk/business
Sensitivity: Internal
If a country exports a greater value than it imports, it has a trade surplus or
positive trade balance, and conversely, if a country imports a greater value
than it exports, it has a trade deficit or negative trade balance.
BALANCE OF TRADE
College of Business
www.derby.ac.uk/business
Sensitivity: Internal
Balance of Import vs Exports
College of Business
www.derby.ac.uk/business
Sensitivity: Internal
Overt Barriers:
• Direct taxes and charges imposed on imports
• Traditionally used by poorer nations to collect revenue
• Also used to protect the home producer from import competition
Covert Barriers:
• Local subsidy = penalty for importers
• Customs entry procedures and delays in granting permission to
produce/import (Law, Compliance)
• Quotas: restrictions placed on the volume of a product that may be
imported
Barriers to World Trade and Marketing
College of Business
www.derby.ac.uk/business
Sensitivity: Internal
Four Tests for a Successful Tr ...
how can I sell pi coins after successfully completing KYCDOT TECH
Pi coins is not launched yet in any exchange 💱 this means it's not swappable, the current pi displaying on coin market cap is the iou version of pi. And you can learn all about that on my previous post.
RIGHT NOW THE ONLY WAY you can sell pi coins is through verified pi merchants. A pi merchant is someone who buys pi coins and resell them to exchanges and crypto whales. Looking forward to hold massive quantities of pi coins before the mainnet launch.
This is because pi network is not doing any pre-sale or ico offerings, the only way to get my coins is from buying from miners. So a merchant facilitates the transactions between the miners and these exchanges holding pi.
I and my friends has sold more than 6000 pi coins successfully with this method. I will be happy to share the contact of my personal pi merchant. The one i trade with, if you have your own merchant you can trade with them. For those who are new.
Message: @Pi_vendor_247 on telegram.
I wouldn't advise you selling all percentage of the pi coins. Leave at least a before so its a win win during open mainnet. Have a nice day pioneers ♥️
#kyc #mainnet #picoins #pi #sellpi #piwallet
#pinetwork
how can i use my minded pi coins I need some funds.DOT TECH
If you are interested in selling your pi coins, i have a verified pi merchant, who buys pi coins and resell them to exchanges looking forward to hold till mainnet launch.
Because the core team has announced that pi network will not be doing any pre-sale. The only way exchanges like huobi, bitmart and hotbit can get pi is by buying from miners.
Now a merchant stands in between these exchanges and the miners. As a link to make transactions smooth. Because right now in the enclosed mainnet you can't sell pi coins your self. You need the help of a merchant,
i will leave the telegram contact of my personal pi merchant below. 👇 I and my friends has traded more than 3000pi coins with him successfully.
@Pi_vendor_247
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how to swap pi coins to foreign currency withdrawable.DOT TECH
As of my last update, Pi is still in the testing phase and is not tradable on any exchanges.
However, Pi Network has announced plans to launch its Testnet and Mainnet in the future, which may include listing Pi on exchanges.
The current method for selling pi coins involves exchanging them with a pi vendor who purchases pi coins for investment reasons.
If you want to sell your pi coins, reach out to a pi vendor and sell them to anyone looking to sell pi coins from any country around the globe.
Below is the contact information for my personal pi vendor.
Telegram: @Pi_vendor_247
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USDA Loans in California: A Comprehensive Overview.pptxmarketing367770
USDA Loans in California: A Comprehensive Overview
If you're dreaming of owning a home in California's rural or suburban areas, a USDA loan might be the perfect solution. The U.S. Department of Agriculture (USDA) offers these loans to help low-to-moderate-income individuals and families achieve homeownership.
Key Features of USDA Loans:
Zero Down Payment: USDA loans require no down payment, making homeownership more accessible.
Competitive Interest Rates: These loans often come with lower interest rates compared to conventional loans.
Flexible Credit Requirements: USDA loans have more lenient credit score requirements, helping those with less-than-perfect credit.
Guaranteed Loan Program: The USDA guarantees a portion of the loan, reducing risk for lenders and expanding borrowing options.
Eligibility Criteria:
Location: The property must be located in a USDA-designated rural or suburban area. Many areas in California qualify.
Income Limits: Applicants must meet income guidelines, which vary by region and household size.
Primary Residence: The home must be used as the borrower's primary residence.
Application Process:
Find a USDA-Approved Lender: Not all lenders offer USDA loans, so it's essential to choose one approved by the USDA.
Pre-Qualification: Determine your eligibility and the amount you can borrow.
Property Search: Look for properties in eligible rural or suburban areas.
Loan Application: Submit your application, including financial and personal information.
Processing and Approval: The lender and USDA will review your application. If approved, you can proceed to closing.
USDA loans are an excellent option for those looking to buy a home in California's rural and suburban areas. With no down payment and flexible requirements, these loans make homeownership more attainable for many families. Explore your eligibility today and take the first step toward owning your dream home.
What website can I sell pi coins securely.DOT TECH
Currently there are no website or exchange that allow buying or selling of pi coins..
But you can still easily sell pi coins, by reselling it to exchanges/crypto whales interested in holding thousands of pi coins before the mainnet launch.
Who is a pi merchant?
A pi merchant is someone who buys pi coins from miners and resell to these crypto whales and holders of pi..
This is because pi network is not doing any pre-sale. The only way exchanges can get pi is by buying from miners and pi merchants stands in between the miners and the exchanges.
How can I sell my pi coins?
Selling pi coins is really easy, but first you need to migrate to mainnet wallet before you can do that. I will leave the telegram contact of my personal pi merchant to trade with.
Tele-gram.
@Pi_vendor_247
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
what is the future of Pi Network currency.DOT TECH
The future of the Pi cryptocurrency is uncertain, and its success will depend on several factors. Pi is a relatively new cryptocurrency that aims to be user-friendly and accessible to a wide audience. Here are a few key considerations for its future:
Message: @Pi_vendor_247 on telegram if u want to sell PI COINS.
1. Mainnet Launch: As of my last knowledge update in January 2022, Pi was still in the testnet phase. Its success will depend on a successful transition to a mainnet, where actual transactions can take place.
2. User Adoption: Pi's success will be closely tied to user adoption. The more users who join the network and actively participate, the stronger the ecosystem can become.
3. Utility and Use Cases: For a cryptocurrency to thrive, it must offer utility and practical use cases. The Pi team has talked about various applications, including peer-to-peer transactions, smart contracts, and more. The development and implementation of these features will be essential.
4. Regulatory Environment: The regulatory environment for cryptocurrencies is evolving globally. How Pi navigates and complies with regulations in various jurisdictions will significantly impact its future.
5. Technology Development: The Pi network must continue to develop and improve its technology, security, and scalability to compete with established cryptocurrencies.
6. Community Engagement: The Pi community plays a critical role in its future. Engaged users can help build trust and grow the network.
7. Monetization and Sustainability: The Pi team's monetization strategy, such as fees, partnerships, or other revenue sources, will affect its long-term sustainability.
It's essential to approach Pi or any new cryptocurrency with caution and conduct due diligence. Cryptocurrency investments involve risks, and potential rewards can be uncertain. The success and future of Pi will depend on the collective efforts of its team, community, and the broader cryptocurrency market dynamics. It's advisable to stay updated on Pi's development and follow any updates from the official Pi Network website or announcements from the team.
If you are looking for a pi coin investor. Then look no further because I have the right one he is a pi vendor (he buy and resell to whales in China). I met him on a crypto conference and ever since I and my friends have sold more than 10k pi coins to him And he bought all and still want more. I will drop his telegram handle below just send him a message.
@Pi_vendor_247
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
how to sell pi coins on Bitmart crypto exchangeDOT TECH
Yes. Pi network coins can be exchanged but not on bitmart exchange. Because pi network is still in the enclosed mainnet. The only way pioneers are able to trade pi coins is by reselling the pi coins to pi verified merchants.
A verified merchant is someone who buys pi network coins and resell it to exchanges looking forward to hold till mainnet launch.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
US Economic Outlook - Being Decided - M Capital Group August 2021.pdf
Econ452 Learning Unit 11 - Part 1 - 2020 fall
1. Learning Unit 11
New Trade Model
Part 1: External Economies of Scale
ECON452
International Economics
2. Objectives
1. Recognize why international trade often occurs from increasing
returns to scale
2. Differentiate between internal and external economies of scale.
3. Explain the sources of external economies of scale and how it
affects pattern of trade
4. Descibe the roles of external economies and knowledge spillovers
in shaping comparative advantage and international trade patterns.
3. Introduction
• The models of comparative advantage assumed constant returns to scale:
– When inputs are doubled, output will double as well.
• In developed countries, we observe many industries and firms operating under
increasing returns to scale (economies of scale):
– When inputs are doubled, output will increase by more than double.
– A larger scale is more efficient: the cost per unit of output falls as a firm or
industry increases output.
• Mutually beneficial trade can arise as a result of economies of scale.
– International trade permits each country to produce a limited range of goods
without sacrificing variety in consumption.
– With trade, a country can take advantage of economies of scale to produce
more efficiently than if it tried to produce everything for itself.
4. Two Types of Economies of Scale
• Economies of scale could mean either that larger firms or a larger industry would
be more efficient.
• External economies of scale occur when cost per unit of output depends on the
size of the industry.
• Internal economies of scale occur when the cost per unit of output depends on
the size of a firm.
5. Two Types of Economies of Scale - Example
• There are 10 firms in industry, producing the same quantity (perfect
competition).
• When the industry size doubles (the demand doubles), a number of firms
increases to 20, so each firm is still producing the same quantity. After the
expansion of industry, the average cost of each firm decreases due to external
economies of scale.
• When the number of firms in industry halves, where five firms double output and
maintain the total output of the industry. After the expansion of output of each
firm, the average cost of each firm decreases due to internal economies scale.
6. Reasons for Economies of Scale
• External economies of scale may occur when an expansion of industry result in
more specialized services becoming available at lower cost (e.g. infrastructure
such as road, power line, Internet)
• Internal economies of scale may occur when a firm can spread overhead cost
(e.g. management cost) or large production makes more efficient (e.g. learning
curve).
7. Economies of Scale and Market Structure
• Both external and internal economies of scale are important causes of
international trade.
• They have different implications for the structure of industries:
– An industry where economies of scale are purely external will typically consist
of many small firms and be perfectly competitive.
– Internal economies of scale result when large firms have a cost advantage
over small firms, causing the industry to become imperfectly competitive.
8. Industry Cluster
• Industry cluster: a group of firms in the same industry and related-industries are
concentrated in one geographic area.
– Clusters consist of companies, suppliers and service providers.
• Examples of industry clusters:
– In the U.S., the semiconductor industry is concentrated in Silicon Valley,
investment banking in New York, and the entertainment industry in Hollywood.
– In developing countries, manufacturing industry clusters are observed in China:
One town in China produces most of the world’s underwear, another nearly all
cigarette lighters.
– In India, information services companies are clustered in Bangalore and Mumbai.
9. External Economies and Industry Cluster
• The industry cluster benefits from external economies of scale.
– Concentrating production of an industry in one or a few locations can reduce
the industry’s costs, even if the individual firms in the industry remain small.
• Sources of external economies
– Specialized equipment or services may be needed for the industry, but are
only supplied by other firms if the industry is large and concentrated.
– Labor pooling: a large and concentrated industry may attract a pool of
workers, reducing employee search and hiring costs for each firm.
– Knowledge spillovers: workers from different firms may more easily share
ideas that benefit each firm when a large and concentrated industry exists
10. PPF with External Economies
• Assumption: Two nations have identical
production possibilities frontier and
indifference curves.
• Production possibilities frontier: External
economies (Increasing Return to Scale) makes
PPF convex from the origin (inward-bending).
– As resources are allocated more in one
industry, its output increases at an
increasing rate, while an output of other
goods whose resources are taken decreases
at decreasing rate.
Quantity of Food (QF)
A
Indifference Curve
Quantity of Cloth (QC)
PPF
QC
A
QF
A
11. Equilibrium under Autarky
• At autarky, each country produces and
consumes at A, where each country can
reach the highest indifference curve.
– Each country produces and consumes
QC
A units of cloth and QF
A units of
food.
– The relative price under autarky is a
slope of tangent line at A.
– Since the relative prices are same in
tow countries, neither country has a
comparative advantage to produce
either goods.
Quantity of Food (QF)
A
Indifference Curve
Quantity of Cloth (QC)
PPF
QC
A
QF
A
12. External Economies and Pattern of Trade
• Two countries can gain from specialization and
trade.
• Home specializes to produce cloth at QH, while
Foreign specializes to produce food at QF.
– Choice of specialization is not based on
comparative advantage, but incidental.
• After trade, each country reach Point D at the
highest utility, where DC units of cloth and DF
units of food are consumed.
• Each country is better off as compared with
the autarky at A.
Quantity of Food (QF)
QH
Indifference Curve
Quantity of Cloth (QC)
PPF Slope = -PC/PF
Isovalue Line
QF
D
DF
DCQC
A
QF
A
A
13. External Economies and Pattern of Trade
• Each country may end up with monopoly
due to increasing returns to scale.
• This model explains why we observe large
trades of intermediate goods across
countries.
– Each country specializes to produce
certain parts of the final products to take
an advantage of external economies.
– In the end, all parts are shipped to a
country to be assembled into the final
products with eternal economies.
– Off-shoring and outsourcing keep costs
down in manufacturing.
Quantity of Food (QF)
QH
Indifference Curve
Quantity of Cloth (QC)
PPF Slope = -PC/PF
Isovalue Line
QF
D
DF
DCQC
A
QF
A
14. Model of External Economies
• Model of external economies is
represented by assuming that the larger
the industry, the lower the industry’s
average costs.
• There is a forward-falling supply curve:
the larger the industry’s output, the lower
the price at which firms are willing to sell.
• As in ordinary supply-and-demand
analysis, market equilibrium is at point 1,
where the supply curve intersects the
demand curve, D. The equilibrium level of
output is Q1, the equilibrium price P1.
15. External Economies and Market Equilibrium
• Prior to international trade,
equilibrium prices and output for
each country would be at the point
where the domestic supply curve
intersects the domestic demand
curve.
• Assuming the same technology
(forward-falling supply curves are
same in two countries), due to
greater demand for the products in
China, in the absence of trade, the
price of the product in China,
PCHINA, is lower than the price of the
product in the United States, PUS.
16. External Economies and International
Competition
• When two countries open-up for trade in the
products, consumers in both countries will purchase
cheaper products produced in China.
• The Chinese button industry will expand, while the
U.S. button industry will contract.
• This process feeds on itself: As the Chinese industry’s
output rises, its costs will fall further; as the U.S.
industry’s output falls, its costs will rise.
• In the end, all the products will be produced in China.
• Output rises from Q1 to Q2, leading to a fall in the
price of buttons from P1 to P2, which is lower than the
price of the product in either country before trade.
17. External Economies and International Trade
• Very different from the implications of models without increasing returns.
• In the standard trade model relative prices converge as a result of trade.
– If a cloth is relatively cheap in the home country and relatively expensive in
the foreign country before trade opens, the trade will raise cloth prices in
Home and reduce them in Foreign.
– In the end, both countries produce cloth at the same price which is between
pre-trade prices.
• With external economies, by contrast, the effect of trade is to reduce prices
everywhere.
– Countries drop out from production because they cannot achieve the same
low cost of production.
18. Importance of Established Advantage
• What might cause one country to have an initial advantage from having a lower
price?
• One possibility is comparative advantage due to underlying differences in
technology and resources.
• If external economies exist, however, the pattern of trade could be due to
historical accidents:
– Countries that start as large producers in certain industries tend to remain
large producers even if another country could potentially produce more
cheaply.
– Ex. Silicon Valley, Hollywood, NYC
19. Established Advantage and International
Competition
• Assume that the Vietnamese cost curve (ACVIETNAM) lies
below the Chinese curve (ACVIETNAM) because Vietnamese
wages are lower than Chinese wages.
• At any given level of production, Vietnam could
manufacture goods more cheaply than China. Thus
Vietnam could potentially supply the world market more
cheaply than China.
• If the Chinese industry gets established first, it can produce
and sell goods at the price P1.
• When the Vietnamese industry starts producing the goods,
it costs at C0 (with small production).
• Because the Chinese industry has already established the
market and reached at lower price at P1, the Vietnamese
industry cannot compete.
20. Established Advantage and Pattern of Trade
• Ideally, the country which can produce at cheapest cost should produce and
supply to the world market, then the world economy as a whole benefits.
• However, under external economies once a country establishes the market
and supplies the products to the world market at the low price, even if new
comer can manufacture goods more cheaply, new comer may not be able to
enter the world market and compete with the country.
• No guarantee that the right country will produce a good that is subject to
external economies.
• So a pattern of specialization established by historical accident may persist
even when new producers could potentially have lower costs.
21. Welfare under External Economies – Autarky
or Trade
• Imagine that Thailand could make watches
more cheaply, but Switzerland got there first.
• Thailand imports watches from Switzerland,
which is able to supply the world market
(DWORLD) at a price (P1) low enough to block
entry by Thai producers, who must initially
produce the watches at cost C0.
• If Thailand were to block all trade in watches,
it would be able to supply its domestic market
(DTHAI) at the lower price, P2.
• Trade could make Thailand worse off, creating
an incentive to protect its potential watch
industry from foreign competition.
22. Trade and Welfare under External Economies
• Trade based on external economies has an ambiguous effect on national welfare.
– There will be gains to the world economy by concentrating production of
industries with
external economies.
– It’s possible that a country is worse off with trade than it would have been
without trade: a country may be better off if it produces everything for its
domestic market rather than pay for imports.
• It’s still to the benefit of the world economy to take advantage of the gains from
concentrating industries.
– Each country wanting to reap the benefits of housing an industry with
economies of scale creates trade conflicts.
– Overall, it’s better for the world that each industry with external economies
be concentrated somewhere.
23. Dynamic Increasing Returns
• So far, we have considered cases where external economies depend on the
amount of current output at a point in time.
• But external economies may also depend on the amount of cumulative output
over time.
• Dynamic increasing returns to scale exist if average costs fall as cumulative
output over time rises.
• Dynamic increasing returns to scale could arise if the cost of production depends
on the accumulation of knowledge and experience, which depend on the
production process over time.
• A graphical representation of dynamic increasing returns to scale is called a
learning curve.
24. The Learning Curve
• The learning curve shows that unit cost is lower
the greater the cumulative output of a country’s
industry to date.
• A country that has extensive experience in an
industry (L) may have a lower unit cost than a
country with little or no experience, even if that
second country’s learning curve (L*) is lower—
for example, because of lower wages.
25. Effect of Dynamic Increasing Returns
• Like external economies of scale at a point in time, dynamic increasing returns to
scale can lock in an initial advantage or a head start in an industry.
• Can also be used to justify protectionism.
– Temporary protection of industries enables them to gain experience: infant
industry argument.
– But temporary is often for a long time, and it is hard to identify when external
economies of scale really exist.
26. Economic Geography
• Economic geography: Study of international trade, interregional trade
and the organization of economic activity in metropolitan and rural
areas.
– Economic geography studies how humans transact with each other across space.
– Communication changes such as the Internet, e-mail, text mail, video
conferencing, mobile phones (as well as modern transportation) are changing
how humans transact with each other across space.
27. Disclaimer
Please do not copy, modify, or distribute
this presentation
without author’s consent.
This presentation was created and owned
by
Dr. Ryoichi Sakano
North Carolina A&T State University
Disclaimer
Please do not copy, modify, or distribute
this presentation
without author’s consent.
This presentation was created and owned
by
Dr. Ryoichi Sakano
North Carolina A&T State University