Introduction to Theories of International Trade

Introduction to Theories of International Trade In this concept there are mainly two theories that are classical theory of trade and new trade theory each differentiates from each other with different advantages, assumption and drawbacks. Exchange of goods and services on an international level between two or more countries is stated as international trade. Trade generally takes place between different companies it is of different goods and services. An import is goods and services bought by other country for local use. Example: UK imports gold, telecom equipment from India and export is the process of selling the goods and services which the host country has produced in the country more than sufficient. Example: Tea is exported to UK from India. However, government and individual person often buy and sell products and services internationally resulting international trade. Integration of the world economy is more than ever before. We participate in world/global economy by purchasing or selling goods and services in day to day lif e. Industrial equipments, oil, agricultural products, services like banking transportation, telecommunication, and tourism services are main part of international trade commonly. International transportation and communication cost has been reduced significantly resulting in greater integration between the economies of the world. The interdependence of countries can affect prices, wages, employment, and production in other country; it also affects economic trends and financial condition of each other. For prosperity countries have to work together more closely and rely on each other. Classical Trade theory: Classical theory focused mainly on occurrence of trade. The firms felt need of a separate theory due to fundamental differentiation of internal trade. These theories feature the variation in comparative benefit of manufacturing commodities of 2 countries to the diversity in the manufacturing competence of workers in that particular country it is focused on single value prices. Factor price differences are never considered in this theory. There are several sub theories in this particular concept which is explained as followed. (Sinha, n.d.) Absolute advantage Theory of trades (Adam smith, 1776): In the 2nd part of the 18th economic progress got complicated due to mercantilism policies. In the book The Wealth of Nations published in 1776 author Adam Smith stated that mercantilism theory favors the producers and reduces the interest of the consumers. Adam smith says in his theory that exports are profitable but countries should also import goods and services to satisfy better requirements of consumers instead of making them here in internal market. As we can see in the figure 1, country 1 has absolute advantage in good A production/resources and country 2 has absolute advantage in good B production/resources so country 1 should export good A to country 2 and import good B from country 2 vise versa. (Anon, n.d.) Figure 1: Absolute Advantage (Absolute Advantage n.d.) Assumptions of absolute advantage theory: Trade between two countries for two commodities: If we take three or more countries it does not help analytically for absolute advantage theory. Efficiency of the product: Countrys goal is not always efficiency comparing at the level of the world it is not easy to produce efficient product every time. Zero transportations cost: Transportation cost is not considered in absolute advantage theory. Factor mobility/immobility: Theory presumes that all the resources are mobile in the country and immobile between two or more countries. Total employment: Theory considers that every country has full employment in the whole country. (Anon, n.d.) Comparative advantage Theory (David Ricardo, 1817): This theory of David Ricardo states that both the countries involved in trade can gain a lot even if one of the countries is producing less than all goods and services that produced by other country. As can be seen in the graph below country B is producing more than country A in both the goods that is produced in both countries. Both the counties should specialize in what there is low opportunity cost is required. (Anon 1, n.d.) Figure 2: Comparative Advantage (Comparative Advantage n.d.) No or low transportation cost: consideration of the transportation cost is not even taken in this theory also. No negative externalities: theory does not say about externalities affecting trade, and it also does not take into consideration that there could be negative externalities for more production. (Anon 2, n.d.) There are no economies of scale: Due to different policies of government for particular country it becomes hard to trade freely and affects the total production and eventually affecting to the scale of economy. (Anon 3, 2008) Mercantilism Theory (16th century): Mercantilism theory is a thinking of 16th century. Major trading nations were thinking that if we increase our exports internationally we will gain power, wealth and also the precious metals like gold and silver in return. The theory says that in total world there was only fixed wealth which will increase our countries wealth resulting in becoming powerful country through either importing or exporting the goods in high quality but in lower cost. Earlier days transactions was use to take place in the form of either in gold or in silver coins which created trend of exporting more and importing less is called as mercantilism. (Anon1, n.d.) Mercantilism is time bounded; it is short term because after some period of time resources will be over due to large no of use of the raw material. Then countries will have to import the same good to their own country. Certain goods should be imported by any country to avoid later effect of scarcity for any goods and services. (Anon 4, 2008) Factor Endowments Theory (Heckscher in 1919, Ohlin in 1933): In this theory both Swedish economists Heckscher and Ohlin have different view/explanation about comparative advantage. They both think that comparative advantage comes from difference in national factor endowments. Factor endowments means the scope of the country is endowed with resources like land, labor, and capital, workforce, and infrastructure. Different countries have different factors endowed, and different factor endowments explain differences in factor costs. To lower the cost the factor should be more profuse. This theory proposes that the nations would export those goods that makes demanding use of those factors that are locally more in numbers, and should import those goods those have scarcity locally. (Aswathappa, 2010) New trade theory: This theory endeavor to comprehend and give details of the global trade affect the diversity of goods accessible to consumer around the world, these theories also describe concentration of market structure. Analysis of Trade: The testimony brings the awareness that the trade between India and U.K has historical trade relations. Indias exports to U.K was beneficial to both countries as U.K use to import raw material and make it into finished goods and again export those products to other countries. According to the survey it is observed that India had good revenue when the exports were high to U.K but as India moved towards diversification the exports of the country started declining since the year 2000. Both countries are the top investors in the economies of each others economies, this enables long term benefits to both countries. (Anon 5, 2012) Exports of India: The current situation of Indias exports shows positive sign on the trade i.e. exports of the country was worth 23698 million USD. In the GDP 22% of exports is been contributed, out of which jewelry constitutes 16% of contribution in exports. Mainly India exports to U.S, European Union, China Arab Emirates. (Tradingeconomics 1, 2012) Exports of U.K: The current market situation of U.K according to the records is 40. 5 Billion GBP in September 2012. This country is considered as fifth largest nation. The main export of U.K is telecommunication equipment, aircrafts, automatic data processing equipment etc. U.K mainly exports goods and services to Ireland, USA, France and Germany. (Tradingeconomics 2, 2012) Positive impacts of International trade on India and U.K: The growth of India rose above 6% after the year 2000. Overall employment also increased from 1% to about 3% which is beneficial to the economy. Liberalization of trade policies enabled to bring efficiency in several terms. Improved standard of living of the country. (Sankaran, Abraham, and Joseph, n.d.) Increase in possible growth of the business. Expand market share globally. Enables steady variation of market.(Economywatch, 2010) Protectionism of trade theory: This concept came into existence in order to protect the interest of the country who is involved in international trade. Here government protects the firms from exploitation of other countries. Typical method of protectionism is direct state intervention, subsidies, tax cuts to local business, quotas and tariffs. These are main types of protectionism method used by the government. Merits of protectionism: Protectionism of international trade helps protecting the local organization and employment. With help of reduction in imports economical aggregate demand will increase. Country can develop some laws to avoid dumping. Foreign companies bring their products and sell them in lowest price than the production cost. Protectionism helps in developing new domestic firm to grow faster blocking the foreign company to develop locally. (Gulrajani, 2009) Demerits of protectionism: Innovation and improvement will become weak as there will not be much of competition due to protectionism. Dismissal and burnout will be the ultimate result of protectionism. Lower or bad quality might dissatisfy the customers because of long term protectionism. Redundancy can become serious issue due to less innovation or improvement. Protectionism affects the countries economy and also the world economy. Many countries are now avoiding protectionism ad they are favoring more of free trade agreements. (Anon 8, n.d.) Analysis of Comparative Advantage: At a lower opportunity cost when a country produces goods and services when compared with other country that particular country is said to have comparative advantage. (Economicshelp, n.d.) Comparative advantage of India: India has huge population therefore this particular country has good labor and so it is specialized in labor intensive product. This capability differentiates themselves from other countries, and makes maximum use of it in order to make maximum profits which would add to host countries economy. (Tradingeconomics 3, 2012) Comparative advantage of U.K: U.K is vast country therefore they are specialized in several goods but mainly the comparative advantage of this country is manufactured goods i.e. is pharmaceutical products, telecommunication product etc. the quality provided by this country for these country makes product outstanding also the technologies use to manufacture these product ensure efficiency in goods that exported. (Economicsonline, n.d.) Criticism to Comparative advantage: Even if the countries do not have clear comparative advantage, they aim to take risk by broadening there horizons for goods and services. The assumption of two country and two goods is incorrect as the real world is too complex by exporting and importing different services and goods. This concept is not constant i.e. it can change over a period of time. In this concept exchange rates and relative prices are not taken into consideration. Structural unemployment is possible if there is complete specialization as there are some cases where workers cannot transfer from one sector to another. Without any diminishing return this concept is perfectly mobile. (Economicsonline, n.d.) Conclusion: International trade and investment is constituted by economic relation. This irregularity is embedded in a situation where prosperous countries are impatient to stipulate free trade for others but are hesitant to compel it on themselves and are capable to evade doing so. The current market of international trade promotes growth and aims to reduce poverty. Different theories have different assumptions but the modern theory is considered to be more effective then the other as it focuses on both i.e. exports as well imports. The protectionism concept is effectively being used by the countries in order to avoid exploitation and also ensures smooth going in trade.

A Narrow Fellow in the Grass – 1

â€Å"A Narrow Fellow in the Grass† By Emily Dickinson. â€Å"A Narrow Fellow in the Grass† Is believed to have been written in 1865. About a year later it was published under the title â€Å"The Snake† by a journal called Springfield Republican. This poem express nature's infamous creatures, the snake. The poem is built around what appears to be and what is. This poem is meant to be read aloud and appreciated for it's precision. Some would say â€Å"A Narrow Fellow in the Grass† is perhaps the most nearly perfect poem addressing nature. Also this poem itself has received a great deal of critical attention.In the opening lines, Dickinson cleverly states the subject of the poem, a snake. She makes the snake sound harmless. The term â€Å"narrow Fellow† is a nice form of colloquial language â€Å"narrow† meaning small, and â€Å"fellow† being a familiar term for boy or man. The choice of words she uses is also interesting like the word à ¢â‚¬Å"rides† sounds like â€Å"glides†. It gives the impression that the snake is being carried, or that it is floating about. The words could also say torment, harass, of tease which would fit the snake's sly tempter.Also the snake seems to take people by surprise. Lines five through eight describes the way a snake moves through tall grass. The grass is compared to hair and the snake is compared to a comb. The snake is quick, long, slender, and marked with spots. The snake slanders along in a ghost like manner. In the lines following nine through twelve the snake likes wet and mushy land. The corns dry environment is not suitable for the snakes wet environment therefore a snake will not be found in a corn field.The speaker mentions that he is barefoot in a childhood encounter, which the thought of a snake slithering across a humans bare skin makes many people cringe. The word â€Å"barefoot† makes the speaker seem even more vulnerable to the snake's potential th reat. In lines thirteen through sixteen the speaker continues to talk about his childhood encounter and he sees something that seems to be a whip-lash. He bends down to pick up the â€Å"whip† just to find that it is slithering away. Oddly, the definition of â€Å"wrinkle† is â€Å"a clever trick†.In these lines he was tricked by the snake for it was not what it appeared to be. The image of a snake â€Å"wrinkling† suggests the snake was frightened by the approach of the speaker. Also, in lines seventeen through twenty the speaker claims to have a connection to the outdoors and its animals. He feels close to these creatures and he describes this connection as a â€Å"transport† In lines twenty one through twenty four the speaker describes the feeling of an encounter with a snake as a moment of shock and fear.He mentions on how he had tighter breathing from the panic. Most people who has encountered with a snake has felt the fear and the panic. In the final line he describes the feeling with the metaphor â€Å"zero at the bone† referring to the bone chilling terror. The end suggest that the snake which is referred as harmless might possible be deceptive. The speaker, which suggest that he loves all animals, cannot love dangerous trickster the snake in the grass. The speaker reacts to the snake as if it were a living terror of the unknown, for it is both chilling and startling.Dickinson wrote several â€Å"riddle† type poems, where she uses metaphor to compare her subject to something, without letting you know. Each stanza has â€Å"clues† in the form of imagery, pictures such as the grass â€Å"as a comb†. â€Å"A Narrow Fellow in the Grass† is written in six quatrains, or stanzas of four lines each, rhyming only in the second and fourth lines. Most of the rhythms are iambic, meaning the poem has regularly recurring segments, in which the first syllable is unstressed and the second is stress ed. â€Å"A Narrow Fellow in the Grass† can be interpreted on several levels.It could be read as just a description of the snake. Also Dickinson's imagery can be read as sexually nuanced. Dickinson's poetic technique is very much an art form she worked hard to refine and hone. The readers today can gain so much from Dickinson poems and her technique. She leaves so much unsaid, and yet, says so much with so little. Dickinson uses the device of sound throughout this poem; hearing this poem is as important as seeing the words. Dickinson creates both a visual and an auditory image of the snake with her language.

Reaction Paper in Opening Bank Account Essay

Opening bank account today would seem so easy. We can easily avail of a wide range of deposit products that answer our needs for greater accessibility to our funds, value-added features, competitive rates and convenience. Upon opening an account to the bank (RCBC), the bank gave me a registration form that includes details and some basic information about my identity. Honestly, I find it uneasy to fill up those forms because of lots of information it requires. However, I just used to think that the reason for this is to protect them and to comply with a variety of banking regulations. Aside from signing the information sheet, the bank also requires me to sign their banking terms and agreements which only mean that I have to abide to certain rules and accept responsibility for certain actions. Like other banks, the RCBC also offers ATM card known as MyWallet card. This all-in-one card allows us to enjoy electronic banking convenience anytime, anywhere and it will allow us to do transa ctions like a regular ATM card: withdrawals, cashless shopping, balance inquiry and bills payment–all these, without the hassles of keeping a monthly maintaining balance. Plus, no penalty will be charged even if we’re going to withdraw all the money in our account. For me, this is really advantageous especially for us as a student who only have limited budget and allowance for savings. Also, having bank account is really convenient. For example, if I have a bank account, I can easily pay bills using ATM. It’s also cheaper than buying a money order (and I will have proof of bank statements that I paid my bills). If I get an Automated Teller Machine (ATM) or debit card for the account, I can withdraw money easily or make payments at stores since a debit card is usually accepted for purchases anywhere credit cards are accepted. I can say that opening a bank account is an opportunity for me to learn how to manage financial aspects especially in the near future if Ià ¢â‚¬â„¢m already a professional.

Contemporary Issues in Criminal Justice - 1817 Words

The United States Criminal Justice System is a fundmental part to society that focuses on protecting citizens in the United States Constiution as well as ensuring each individual is law adbiding law and not commiting serious acts of crimes. Each law was put in state and federal statues to ensure it continues and as time has changed some of the laws have not changed. In present day, the criminal justice system faces comptemporary issues as well as trends that not only affect today but in the future and how important each member of society hold a significant value to the criminal justice system. For many decades the criminal justice system has endured many issues and problems that are currently questioning exactly how fair United States†¦show more content†¦The death penalty has many advantages and disadvantages and the criminal justice system is constantly fighting the battle to keep it alive and well. Prison overcrowding is another contemporary issue that is currently affecting the criminal justice throughout the United States. Society is aware of the consequences involving committing a crime, however for offenses that are considered non-violent and the offender who has not been in trouble with the law in the past faces severe punishment such as a violent offender. Drug offenses is one crime that caused correctional facilities population to skyrocket and instead of finding the best alternative for punishment prisons face an unkinown number of crimes within the facilities. In the State of Oklahoma, approximately 26, 539 offenders are incarcerated in priosn whereas probation has a population of 21,085(American Legislative Exchange Council,2014). Statewide Harm Reduction Coalition(n.d.) states,† Prior to the current prohibition era the U.S. Prison population was a quarter of what it is today. But 30 years ago the â€Å"War on Drugs† was launched. 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