Trade theories provide explanations for how and why international trade occurs. There are traditional and modern trade theories. Traditional theories include mercantilism, absolute advantage, and comparative advantage. Mercantilism focused on accumulating gold by promoting exports and limiting imports. Absolute advantage refers to when a country can produce a good more efficiently. Comparative advantage expanded on this by comparing production efficiencies between two goods. Modern theories include factor endowments, product life cycles, new trade, and Porter's diamond model. Factor endowments ties trade to a country's abundant production factors. Product life cycles track a good through stages from introduction to decline. New trade incorporates economies of scale and product differentiation. Porter's diamond model identifies national factors that can
The trade theory that first indicated importance of specialization in production and division of labor is based on the idea of theory of absolute advantage which is developed first by Adam Smith in his famous book The Wealth of Nations published in 1776.
Smith argued that it was impossible for all nations to become rich simultaneously by following mercantilism because the export of one nation is another nation’s import and instead stated that all nations would gain simultaneously if they practiced free trade and specialized in accordance with their absolute advantage. Smith also stated that the wealth of nations depends upon the goods and services available to their citizens, rather than their gold reserves. While there are possible gains from trade with absolute advantage, the gains may not be mutually beneficial. Comparative advantage focuses on the range of possible mutually beneficial exchanges.
Adam Smith argued that a country has an absolute advantage in the production of a product when it is more efficient than any other country producing it.
Countries should specialize in the production of goods for which they have an absolute advantage and then trade these goods for the goods produced by other countries
In economics, principle of absolute advantage refers to the ability of a party (an individual, or firm, or country) to produce more of a good or service than competitors, using the same amount of resources.
Fiduciary or paper money is issued by the Central Bank on the basis of
computation of estimated demand for cash. Monetary policy guides the Central
Bank’s supply of money in order to achieve the objectives of price stability (or low
inflation rate), full employment, and growth in aggregate income.
This presentation covers the fundamental concepts and models related to the study of international trade. It includes discussions on comparative advantage, international trade models, and trade policies. The aim is to provide a basic understanding of the theories of the international trade.
The trade theory that first indicated importance of specialization in production and division of labor is based on the idea of theory of absolute advantage which is developed first by Adam Smith in his famous book The Wealth of Nations published in 1776.
Smith argued that it was impossible for all nations to become rich simultaneously by following mercantilism because the export of one nation is another nation’s import and instead stated that all nations would gain simultaneously if they practiced free trade and specialized in accordance with their absolute advantage. Smith also stated that the wealth of nations depends upon the goods and services available to their citizens, rather than their gold reserves. While there are possible gains from trade with absolute advantage, the gains may not be mutually beneficial. Comparative advantage focuses on the range of possible mutually beneficial exchanges.
Adam Smith argued that a country has an absolute advantage in the production of a product when it is more efficient than any other country producing it.
Countries should specialize in the production of goods for which they have an absolute advantage and then trade these goods for the goods produced by other countries
In economics, principle of absolute advantage refers to the ability of a party (an individual, or firm, or country) to produce more of a good or service than competitors, using the same amount of resources.
Fiduciary or paper money is issued by the Central Bank on the basis of
computation of estimated demand for cash. Monetary policy guides the Central
Bank’s supply of money in order to achieve the objectives of price stability (or low
inflation rate), full employment, and growth in aggregate income.
This presentation covers the fundamental concepts and models related to the study of international trade. It includes discussions on comparative advantage, international trade models, and trade policies. The aim is to provide a basic understanding of the theories of the international trade.
Classical country-based trade theories and Modern Firm-based trade theoriesHelmee Halim
This paper presents an analysis of classical country-based theories and modern firm-based theories. Subsequently, further critical analysis is presented based on Mercantilism, being the least favorable theory and The National Competitive – Porter’s Diamond theory being the most appealing theory. This paper concludes with a case study of Toyota Motor Corporation’s global strategy in the international trade.
In this presentation, we will discuss about how or what conditions trigger international trade, which are further elaborated through various theories of international trade.
To know more about Welingkar School’s Distance Learning Program and courses offered, visit: http://www.welingkaronline.org/distance-learning/online-mba.html
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
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Classical country-based trade theories and Modern Firm-based trade theoriesHelmee Halim
This paper presents an analysis of classical country-based theories and modern firm-based theories. Subsequently, further critical analysis is presented based on Mercantilism, being the least favorable theory and The National Competitive – Porter’s Diamond theory being the most appealing theory. This paper concludes with a case study of Toyota Motor Corporation’s global strategy in the international trade.
In this presentation, we will discuss about how or what conditions trigger international trade, which are further elaborated through various theories of international trade.
To know more about Welingkar School’s Distance Learning Program and courses offered, visit: http://www.welingkaronline.org/distance-learning/online-mba.html
The secret way to sell pi coins effortlessly.DOT TECH
Well as we all know pi isn't launched yet. But you can still sell your pi coins effortlessly because some whales in China are interested in holding massive pi coins. And they are willing to pay good money for it. If you are interested in selling I will leave a contact for you. Just telegram this number below. I sold about 3000 pi coins to him and he paid me immediately.
Telegram: @Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
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how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
how to sell pi coins at high rate quickly.DOT TECH
Where can I sell my pi coins at a high rate.
Pi is not launched yet on any exchange. But one can easily sell his or her pi coins to investors who want to hold pi till mainnet launch.
This means crypto whales want to hold pi. And you can get a good rate for selling pi to them. I will leave the telegram contact of my personal pi vendor below.
A vendor is someone who buys from a miner and resell it to a holder or crypto whale.
Here is the telegram contact of my vendor:
@Pi_vendor_247
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
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
I will leave the telegram contact of my personal pi merchant to trade with
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
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how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
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
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
Currently pi network is not tradable on binance or any other exchange because we are still in the enclosed mainnet.
Right now the only way to sell pi coins is by trading with a verified merchant.
What is a pi merchant?
A pi merchant is someone verified by pi network team and allowed to barter pi coins for goods and services.
Since pi network is not doing any pre-sale The only way exchanges like binance/huobi or crypto whales can get pi is by buying from miners. And a merchant stands in between the exchanges and the miners.
I will leave the telegram contact of my personal pi merchant. I and my friends has traded more than 6000pi coins successfully
Tele-gram
@Pi_vendor_247
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2. What is trade theories?
Trade theories are simply different theories to explain
international trade.
International Trade is the concept of exchanging goods and
services between two countries.
Trade theories explains how goods are traded among various
nations & which goods are advantageous for trading.
For example- USA have advantage in car manufacturing, India
in spices, etc.
3. Classification Of Trade Theories
Traditional
Theories
Modern Theories
1. Mercantilism theory
2. Absolute advantage
theory
3. Comparative advantage
4. Factor endowment
5. Leontief paradox
6. Product life cycle
7. New trade theory
8. Porter`s diamond
theory
4. 1. MERCANTILISM THEORY
⮚This theory was given by Thomas Mun.
⮚ Popular in the 16th and 18th Century.
⮚ It is based on zero sum game.
⮚ During that time, Wealth of nations was measured by stock
of gold and other kinds of metals.
⮚ Primary goal is to increase the wealth of nation by acquiring
gold.
⮚ This theory says that a country should increase gold by
promoting exports and discouraging imports.
5. Assumptions
1. There is a finite amount of wealth in the world.
2. A nation can only grow rich at the expense of other nations.
3. A nation should try to achieve & maintain a favorable trade
balance ( exporting more than its import).
Disadvantages
1. Mercantilism hardly paid attention to the welfare of ordinary
workers.
2. Mercantilism was one way traffic. It focus on export but not
import, it is not easy to be self-sufficient. Many countries of
Europe fails to be self-sufficient which increased their miseries.
6. 2. ABSOLUTE ADVANTAGE THEORY
⮚ This theory was given by Adam Smith in 1776 and argued
mercantilist theory.
⮚ This trade theory is based on positive sum game and expansion
of trade.
⮚ Absolute advantage is when a country can produce a product
more effectively than other country.
⮚ Export goods of production advantage and import goods of
production disadvantage.
⮚ Example – India has an absolute advantage in producing cotton
and brazil has in producing coffee. In this both countries should
supply production advantage to each other.
7. Limitations
1. Fails to explain how free trade can be
advantageous to two countries when one
country can produce all goods.
1. Country not having absolute advantage
can’t gain from free trade
1. Differences in climatic conditions &
natural resources won’t lead to absolute
advantage
8. 3. COMPARATIVE ADVANTAGE
THEORY
⮚It is developed by David Ricardo in 1817.
⮚This theory is the extension of absolute advantage theory. i.e. If a
country has advantage in production of both commodities, then
compare the efficiency of both goods.
⮚Produce and Export the good which can be produced more
efficiently.
⮚Example – India can produce both truck and car efficiency but for
export, India need to compare these goods with each other to find
which goods has more efficiency. If car producing has more
efficiency then India should produce and export manufactured cars.
9. Limitations
1. Ricardo's Theory was based on only two countries & only two
commodities, but international trade is among many countries
with many commodities
2. Assumption of full employment helps theory to explain trade on
the basis of comparative advantage. Cost of production in terms
of labor, may change as countries, at different levels of
employment move towards full employment.
3. Even if any country stopped production, nobody in the industry
wants to lose their job.
4. Another serious defect is that transportation costs are not
considered in determining comparative cost differences
10. 4. FACTOR ENDOWMENT THEORY
⮚ Given by Eli Heckscher and Berlin Ohlin in 1993.
⮚ Also known as factor Proportion theory or Heckscher & Ohlin theory.
⮚ This theory is based on a country’s available production factors i.e.
land, labor, etc. in the country.
⮚ It stated that countries would produce and export those goods which
make intensive use of factors that are locally available in large
quantities. In contrast, import those factors that are in short supply or
locally scarce.
⮚ Example – India has large quantities in labour so India should export
labour intensive goods i.e. coal mining and import capital intensive
goods i.e. oil.
11. Limitations
1. Ignores price differences, transport costs, economies of
scale, external economies etc
2. Gives undue importance to supply & less
importance to demand
3. Assumes that there is
no unemployment
12. 5. LEONTIEF PARADOX
⮚ Findings were contradictory to predictions of Heckscher-
Ohlin theory.
⮚ Given by Wassily Leontief in 1973
⮚ Found out that the United States—the most capital-
abundant country in the world—exported commodities that
were more labor-intensive than capital-intensive.
⮚ Leontief conclude from this result that the U.S. should adapt
its competitive policy to match its economic realities.
13. Limitations
1. Leontief considered only capital & labor inputs, leaving out natural resource inputs.
2. But in reality capital & natural resources are used together in production
14. 6. PRODUCT LIFE CYCLE THEORY
⮚ It is given by Raymond Vernon in the Mid 1960’s and Theory consist of
technology based products.
⮚ A product goes through the life cycle i.e. Introduction, Growth,
Maturity, Decline.
⮚ Country where the product is first launched is Innovator and At the
end of cycle the innovator becomes the importer.
⮚ Example- America has started production of any new product that is
introduction phase, after some time company has reached into growth
phase where the demand has increased and starts export. In last, that
product becomes global standard product so to meet global demand
and to decrease cost of goods. America starts to produce goods in
developing country like India for mass production and starts importing
of goods from India to meet demand.
15. Limitations
⮚ Most appropriate for technology-based products
⮚ Some products not easily characterized by stages of maturity
⮚ Most relevant to products produced through mass
production
16. 7. NEW TRADE THEORY
⮚It is given by Paul Krugman in 1980.
⮚This theory tells about some of the necessary factor. A
countries having these factor can become exporter.
⮚Those three necessary factors are
1. Economies of sale – Reduction in per unit cost
2. Product differentiation i.e. color, durability, brand etc.
3. First mover advantage i.e. Capturing market
17. Limitations
1. Can only treat a situation when there are many firms with
different production processes.
2.Assumes that all firms are well-formed, which may not be
true in every case.
18. 8. PORTER’S DIAMOND MODEL
⮚Developed by Michael Porter in his book ‘The Competitive
Advantage of Nations’ in 1990.
⮚It is also known as National Advantage Trade Theory.
⮚Explains factors that are available to a nation.
⮚Four factors together forms “PORTER’S DIAMOD MODEL”.
⮚These factors can give competitive advantage to the economy
of country.
⮚Export goods from that industry where the diamonds is
favorable.
Factor
Conditions
Related &
Supporting
Industries
Strategy,
Structure, Rivalry
Demand
Conditions
DIAMOND
MODEL
19. Limitations
1. In his book, Porter was optimistic about future of Korea
& less optimistic about future of others.
2. Other factors may influence success – there may be
events that could not have been predicted, such as new
technological developments or government interventions.