International economics

I. The law of comparative advantage

1. The Mercantilists’ views on trade
- Mercantilism: chủ nghĩa trọng thương
- Export surplus:
- The wealth of a nation:
- At the expense of:
- Zero-sum game: trò chơi có tổng lợi ích = 0
- Government intervention:
- Export – promotion policy: xuất khẩu- csach phát triển
- Trade protectionism: xu hướng bảo hộ thuơng mại
- Absolute advantage: lợi thế tuyêth đối
- Specialization: lợi ích tuyệt đối
- laissez-faire: giảm sự can thiệp của chính phủ vào nền kinh
tế (áp dụng cho kinh tế thị trường: the market economy)
- the labor theory of value:
- homogeous factor: yếu tố đồng nhất
Question:
+ what are the main content of The Mercantilists’ views on
trade?
(ex >im -> export surplus -> the nation become richer &
wealthier. Stimulate ex and restrict im -> government
intervention)
The wealth of a nation = the inflow of gold, silver, … precious
medals
= the high accumulation of ….
+ How dit the context impact on developing the
Mercantilists’ views on trade?
The colonization and the first industrial revolution
+ what are the differences from the views on the wealth of a
nation on mercantilism and in the world today?
The resources of a nation: natural resources, human capital,
technology, money,…
 + Why do they say that the Mercantilists’ views on trade was
a zero-sum game?
A nation could gain in trade only at the expense of other
nations.
+ How are the Mercantilist’ views important and appropiate
in the trade policy?
Appropriate restrict improves to stimulate domestic
production and employment.
+ what are the success and drawbacks of the Mercantilists’
views on trade?
Inapprociate based on force market, imbalance ex.

2. Trade based on Absolute advantage: Adam Smith

*Content of theory:
- Trade between 2 nations is based on absolute advantage
and benifits for both nations.
- Absolute advantage: when one nation is more effecient than
another in the production ò the commodity.
- When each nation specializes in the production of the
commodity of its absolute advantage and exchanges part of
its output for the commodity of its absolute disadvantage,
both nations end up consuming more of both commodities.
- All nations would gain from free trade or follow a policy of
“laissez-faire” (a little government interference with the
economic system)

What is the international

 Chapter 3

I. International trade theory

II. Trade policy
- Trade restriction
- Trade promotion
- Trade measures/instruments/tools
- Tariff (ch8)
- Non-tariff barriers (ch9)