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Trade Diversion
Trade diversion is an economic term related to international economics in which trade is diverted from a more efficient exporter towards a less efficient one by the formation of a free trade agreement or a customs union. Total cost of good becomes cheaper when trading within the agreement because of the low tariff. This is as compared to trading with countries outside the agreement with lower cost goods but higher tariff. The related term Trade creation is when the formation of a trade agreement between countries decreases the price of the goods for more consumers, and therefore increases overall trade. In this case the more efficient producer with the agreement increases trade. The terms were used by 'old' Chicago School economist Jacob Viner in his 1950 paper ''The Customs Union Issue''. Notable uses An early use of the terms was by Jacob Viner in his 1950 paper ''The Customs Union Issue''. Later in same decade Richard Lipsey noted that not only the location of production but ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economic
An economy is an area of the Production (economics), production, Distribution (economics), distribution and trade, as well as Consumption (economics), consumption of Goods (economics), goods and Service (economics), services. In general, it is defined as a social domain that emphasize the practices, discourses, and material expressions associated with the production, use, and management of scarcity, scarce resources'. A given economy is a set of processes that involves its culture, values, education, technological evolution, history, social organization, political structure, legal systems, and natural resources as main factors. These factors give context, content, and set the conditions and parameters in which an economy functions. In other words, the economic domain is a social domain of interrelated human practices and transactions that does not stand alone. Economic agents can be individuals, businesses, organizations, or governments. Economic transactions occur when two grou ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
International Economics
International economics is concerned with the effects upon economic activity from international differences in productive resources and consumer preferences and the international institutions that affect them. It seeks to explain the patterns and consequences of transactions and interactions between the inhabitants of different countries, including trade, investment and transaction. * International trade studies goods and services flows across international boundaries from supply-and-demand factors, economic integration, international factor movements, and policy variables such as tariff rates and trade quotas. * International finance studies the flow of capital across international financial markets, and the effects of these movements on exchange rates. * International monetary economics and international macroeconomics study flows of money across countries and the resulting effects on their economies as a whole. * International political economy, a sub-category of interna ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Trade
Trade involves the transfer of goods and services from one person or entity to another, often in exchange for money. Economists refer to a system or network that allows trade as a market. An early form of trade, barter, saw the direct exchange of goods and services for other goods and services, i.e. trading things without the use of money. Modern traders generally negotiate through a medium of exchange, such as money. As a result, buying can be separated from selling, or earning. The invention of money (and letter of credit, paper money, and non-physical money) greatly simplified and promoted trade. Trade between two traders is called bilateral trade, while trade involving more than two traders is called multilateral trade. In one modern view, trade exists due to specialization and the division of labour, a predominant form of economic activity in which individuals and groups concentrate on a small aspect of production, but use their output in trades for other products ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Productive Efficiency
In microeconomic theory, productive efficiency (or production efficiency) is a situation in which the economy or an economic system (e.g., bank, hospital, industry, country) operating within the constraints of current industrial technology cannot increase production of one good without sacrificing production of another good. In simple terms, the concept is illustrated on a production possibility frontier (PPF), where all points on the curve are points of productive efficiency. An equilibrium may be productively efficient without being allocatively efficient — i.e. it may result in a distribution of goods where social welfare is not maximized (bearing in mind that social welfare is a nebulous objective function subject to political controversy). Productive efficiency is an aspect of economic efficiency that focuses on how to maximize output of a chosen product portfolio, without concern for whether your product portfolio is making goods in the right proportion; in misguided a ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Free Trade Agreement
A free-trade agreement (FTA) or treaty is an agreement according to international law to form a free-trade area between the cooperating states. There are two types of trade agreements: bilateral and multilateral. Bilateral trade agreements occur when two countries agree to loosen trade restrictions between the two of them, generally to expand business opportunities. Multilateral trade agreements are agreements among three or more countries, and are the most difficult to negotiate and agree. FTAs, a form of trade pacts, determine the tariffs and duties that countries impose on imports and exports with the goal of reducing or eliminating trade barriers, thus encouraging international trade. Such agreements usually "center on a chapter providing for preferential tariff treatment", but they also often "include clauses on trade facilitation and rule-making in areas such as investment, intellectual property, government procurement, technical standards and sanitary and phytosanitary i ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Customs Union
A customs union is generally defined as a type of trade bloc which is composed of a free trade area with a common external tariff.GATTArticle 24 s. 8 (a) Customs unions are established through trade pacts where the participant countries set up common external trade policy (in some cases they use different import quotas). Common competition policy is also helpful to avoid ''competition deficiency''. Purposes for establishing a customs union normally include increasing economic efficiency and establishing closer political and cultural ties between the member countries. It is the third stage of economic integration. Every economic union, customs and monetary union and economic and monetary union includes a customs union. WTO definition The General Agreement on Tariffs and Trade, part of the World Trade Organization framework defines a customs union in the following way: Historical background The German Customs Union, the Zollverein, which was established in 1834, and gradu ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Chicago School Of Economics
The Chicago school of economics is a neoclassical school of economic thought associated with the work of the faculty at the University of Chicago, some of whom have constructed and popularized its principles. Milton Friedman and George Stigler are considered the leading scholars of the Chicago school. Chicago macroeconomic theory rejected Keynesianism in favor of monetarism until the mid-1970s, when it turned to new classical macroeconomics heavily based on the concept of rational expectations. The freshwater–saltwater distinction is largely antiquated today, as the two traditions have heavily incorporated ideas from each other. Specifically, new Keynesian economics was developed as a response to new classical economics, electing to incorporate the insight of rational expectations without giving up the traditional Keynesian focus on imperfect competition and sticky wages. Chicago economists have also left their intellectual influence in other fields, notably in pioneerin ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Jacob Viner
Jacob Viner (3 May 1892 – 12 September 1970) was a Canadian economist and is considered with Frank Knight and Henry Simons to be one of the "inspiring" mentors of the early Chicago school of economics in the 1930s: he was one of the leading figures of the Chicago faculty. Paul Samuelson named Viner (along with Harry Gunnison Brown, Allyn Abbott Young, Henry Ludwell Moore, Frank Knight, Wesley Clair Mitchell, and Henry Schultz) as one of the several "American saints in economics" born after 1860. He was an important figure in the field of political economy. Early life Viner was born to a Jewish family on May 3, 1892, in Montreal, Quebec, to Romanian immigrant parents. He earned his undergraduate degree at McGill University in 1914. He received a PhD at Harvard University, where he wrote his dissertation, under the trade economist F. W. Taussig. Academic career Viner was a professor at the University of Chicago from 1916 to 1917 and from 1919 to 1946. At various times, Vi ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Richard Lipsey
Richard George Lipsey, (born August 28, 1928) is a Canadian academic and economist. He is best known for his work on the economics of the second-best, a theory that demonstrated that piecemeal establishing of individual first best conditions would not necessarily raise welfare in a situation in which all first best conditions could not be satisfied, an article that he co-authored with Kelvin Lancaster, a mathematical economist of high standing. He is currently Professor Emeritus of Economics at Simon Fraser University. Early life and education Born in Victoria, British Columbia, he received a Bachelor of Arts degree in 1951 from the University of British Columbia, a Master of Arts degree in 1953 from the University of Toronto, and a Ph.D. in 1956 from the London School of Economics. Career From 1955 to 1963, he held the positions of Assistant Lecturer, Lecturer, Reader and Professor at the London School of Economics. From 1963 to 1969, he was a Professor of Economics, Chairman ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Consumption (economics)
Consumption is the act of using resources to satisfy current needs and wants. It is seen in contrast to investing, which is spending for acquisition of ''future'' income. Consumption is a major concept in economics and is also studied in many other social sciences. Different schools of economists define consumption differently. According to mainstream economists, only the final purchase of newly produced goods and services by individuals for immediate use constitutes consumption, while other types of expenditure — in particular, fixed investment, intermediate consumption, and government spending — are placed in separate categories (see consumer choice). Other economists define consumption much more broadly, as the aggregate of all economic activity that does not entail the design, production and marketing of goods and services (e.g. the selection, adoption, use, disposal and recycling of goods and services). Economists are particularly interested in the relationship betwee ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Béla Balassa
Béla Alexander Balassa (6 April 1928 – 10 May 1991) was a Hungarian economist and professor at Johns Hopkins University and a consultant for the World Bank. Balassa is best known for his work on the relationship between purchasing power parity and cross-country productivity differences (the Balassa–Samuelson effect). He is also known for his work on revealed comparative advantage. Balassa received a law degree from the University of Budapest. He left Hungary after the Hungarian Revolution of 1956 and went to Austria. While there, he received a grant from the Rockefeller Foundation to study at Yale University, where he received M.A. and Ph.D. degrees in economics in 1958 and 1959, respectively. He won the John Addison Porter Prize for 1959. Balassa also did extensive consulting work for the World Bank, serving as an advisor about development and trade policy. According to an authoritative history of the Bank, Balassa was "a protagonist of the Bank's conceptual transformati ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
European Economic Community
The European Economic Community (EEC) was a regional organization created by the Treaty of Rome of 1957,Today the largely rewritten treaty continues in force as the ''Treaty on the functioning of the European Union'', as renamed by the Lisbon Treaty. aiming to foster economic integration among its member states. It was subsequently renamed the European Community (EC) upon becoming integrated into the first pillar of the newly formed European Union in 1993. In the popular language, however, the singular ''European Community'' was sometimes inaccuratelly used in the wider sense of the plural '' European Communities'', in spite of the latter designation covering all the three constituent entities of the first pillar. In 2009, the EC formally ceased to exist and its institutions were directly absorbed by the EU. This made the Union the formal successor institution of the Community. The Community's initial aim was to bring about economic integration, including a common market an ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
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