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Amity Business School
MBA 2013, 3rd Semester
INTERNATIONAL ECONOMICS AND POLICY
Amity Business School
• How many continents? • How many oceans? • How many countries? • When were nations formed? • How were they organized earlier? • What has happened ever since? • Newest Nation state?
Amity Business School
• What is developed and developing country classification?
Amity Business School
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Amity Business School Course Objectives 10 .
Transformations & Emerging markets – To develop an understanding about International Trade & Globalization – Introduction to International Economic Indicators & Terminologies 11 .Amity Business School Course Objectives The purpose of studying the course: – Visualize & cope with Global Changes in Business scenario – Understanding the role of State – Understanding the role of International Institutions & Trade Policies – Exposure to World Economies.
Competitive Advantage of Nations Case Discussions – 2 cases 12 . Classical Trade Theories – Theory of Absolute Advantage.Session Plan Amity Business School 1. New Trade Theories – IPLC. Major developments in World economy/ politico-economic developments 2. Theory of Relative Advantage and Hecksher Ohlin 4. Foundations of International Economics 3.
ICSID) 13 . Dumping. World Bank and WTO. East Europe. Class Test 1/ Quiz 1 (Objective) 9. Antidumping 8. IDA. IFC. Russia. Africa 7. Bretton Woods – Formation of International Financial Institutions – IMF.Session Plan Amity Business School 5. MIGA. Role of IMF and World Bank (IBRD. China. Economic/ Political/ Legal Systems 6. Role of State .Transformation of Europe. Barriers–Tariff & Non Tariff.
Evolution of WTO . 12.Session Plan Amity Business School 10. Appeal and Appellate procedures Case Discussions – 2 cases 14. Uruguay Rounds 11. Basic Principles (MFN. Tariff Conversions. 12. Structure. NT). Dispute Settlement Mechanism 13.Membership. GATT – Negotiation Rounds. Agreement on a) Agriculture b) Trade-in-Services c) TRIMS d) Intellectual Property Rights. Mid-Semester Test 14 .
Debt Problem 15 . Financial. Trade Blocks. Cartels. 16.EU. Regional Economic Integration & Economic Transformation. EFTA. SAPTA. ACM. Economic. Cultural. SAARC. ASEAN. NAFTA. Levels of Economic Integration 17. ECSCA. Political. OPEC 18. Free Trade.Session Plan Amity Business School 15. CARICOM. Commercial. Legal & Policy issues & their management 19. Marketing. Conflict between Industrialized & Developing Countries 20.
Export-Import Restrictions and Promotion. Investment Policies. East Europe. Relevance to India’s Economy 24.Session Plan Amity Business School Case Discussions – 1 case 21. Emerging Markets . International Economic Indicators . GNP. China.China. Japan. Macro Economic Issues 16 . Asia. EU. Latin America. India. Russia. Purchasing Power. Latin American & Russia 23. GDP. Per-Capita Income. Africa. Global Trade of major economies .US. Class Test 2/ Quiz 2 (Objective) 22.BOP.
Session Plan Amity Business School 25. International Investment – FII and FDI. Forfeiting & Project Exports Case Discussions – 1 case 17 . EXIM Bank. ADB.
Teaching Hours Amity Business School • 30 Sessions • Plan for 30 sessions: – 25 Hours of Teaching and case discussions – 2 hours – Tests (Mid Semester and Class Tests) – 3 hours of presentations 18 .
topic will be assigned – Presentation – guidelines will be given.Amity Business School Internal Evaluation • Mid Semester Test – 1/ 2 Hours (Subjective) • Class Test/ Quiz 1 and 2 – 1 Hour (Half an Hour each) • Group Activities (including presentation on topic assigned and project) – 3 Hours (20 minutes each) – Project – guidelines will be given. case study will be provided after theoretical discussion) 19 . topic will be assigned • Cases – 6 (to be included in class discussion.
case study will be provided after theoretical discussion) 20 . topic will be assigned • Cases – 6 (to be included in class discussion.Components – Internal Evaluation Amity Business School • (8 marks) Mid Semester Test – 1 Hour • (7 marks) Class Test/ Quiz 1 and 2 – 1 Hour (Half an Hour each) • (10 marks) Group Activities (including presentation on topic assigned and project) – 3 Hours (20 minutes each) – Project – guidelines will be given. topic will be assigned – Presentation – guidelines will be given.
Macmillan 3.Amity Business School Text and References 1. Mc Graw Hill 2. International Economics. International Economics. Pearson Education 4. BO Sodersten and Geoffrey Reed (3rd Edition). Francis Cherunilam (4th Edition). Tata Mc Graw Hill 21 . Paul Krugman and Maurice Obstfeld (6th Edition). Economics. International Economics. Samuelson & Nordhaus (18th Edition).
Amity Business School Read and Watch Must Read: • India Unbound. Elephant Paradigm – Gurucharan Das • Capitalism in the Age of Globalisation – Samir Amin (Chapter 1 only) Must Watch: • Capitalism: A Love Story – Michael Moore • Schindler's List May Read: • Das Kapital – Karl Marx 22 .
Amity Business School Introduction to Economics and International Economics 23 .
Amity Business School Economics • Science • Goal .To improve the living conditions of people in their everyday lives. 24 . • 3 fundamental questions: – What commodities are produced and in what quantities? – How are the goods produced? – For whom are goods produced? • Economies organized through – alternative economic systems (WILL BE DISCUSSED) – Which help in allocation of its scarce resource.
Amity Business School Economics • Basic Economic Systems – Market economies – Command economies – Mixed economies • Based on: – Ownership of resources – Allocation of resources • What are resources? 25 .
• Individuals and private firms make major decisions about production and consumption • A system of prices. markets. how and whom goods are produced. profits & loss and incentives & rewards determine what. – Firms produce goods that yield highest profits (what) – By the techniques of production that are least costly (how) – Consumption determined by individuals’ decisions about how to use income generated by labour and land (whom) 26 .Amity Business School Economics • The different forms of an economic organisation are: – Market economy – most economic questions are settled by market mechanisms.
Amity Business School Economics • The different forms of an economic organisation are: – Command economy – the government makes all important decisions about production and distribution. 27 . • Government owns most of the means of production (land and capital) – It owns and directs operations of most enterprises – It employs most workers and directs them what to do – Decides about how the output of society should be divided among different goods and services. • Government answers major economic questions through its ownership of resources and power to enforce decisions.
Amity Business School Economics • The different forms of an economic organisation are: – Mixed economy – has the elements of market and command. 28 .
economies must choose: • Among different potential bundles of goods (what) • Select from among different techniques of production (how) • Decide in the end who will consume the goods (whom) • Economies hence should make choices about – INPUTS (Factors of production) – OUTPUTS 29 .Amity Business School Economics • In answering questions related to what and how things should be produced. – economies are deciding how to allocate resources among thousands of different possible commodities and services . Given that the resources are scarce relative to wants.
– Labour: Human time spent in production – Capital: durable goods of a society to produce other goods. non-energy resources and environmental resources. • OUTPUTS – are useful goods or services that result from the production process and are consumed or employed for further production. – Land (or natural resources): Land. – What outputs to be produced and in what quantities – How to produce them – For whom – outputs should be produced and distributed. energy resources.Amity Business School Economics • INPUTS (Factors of production) – are commodities or services used to produce goods and services. 30 .
31 . • Economic activities between countries are different from those within the countries because: – Factors of production are less mobile between countries than within the country. – Goods are mobile within and between countries but for government restrictions. world economic integration and transition. – the economic interdependence among countries • and includes the effects of such interdependence and the factors which affect it.Amity Business School International Economics • International economics deals with: – International forces influencing the domestic economic conditions – International forces shaping the economic relationship between countries.
475) and High Income Economies • Segmentation into Low. Middle(Lowe middle $1. second and third world countries? 32 .026 to $4.035 and Higher middle $4.Amity Business School Features of Global Economy • Global economy consists of: – A large number of politically independent nations • Nations have – Different types of interdependencies.036 to $12. Middle and High Income Economies – Basis of segmentation? Position of countries? Wealth distribution in the world? Position of India? • First.025 or less). and – Diverse economic characteristics between and within them • Categories of economies: GDP per capital – Low($1.
all third world countries. MDCs. etc. social development indicators. NZ) and South. LDCs. employment generation. Least Developed Countries – Newly Industrializing Economies – developing economies which have been experiencing rapid industrialization – Asian Tigers 33 . not on basis of income alone as Kuwait and UAE that have high per capita income are developing economies. categorized as North (exceptions Australia. underdeveloped countries. criteria such as sectoral distribution of income. are also used.Amity Business School Features of Global Economy – Developing and Developed Economies • Developing – Low and Middle income.
also represent a transition from authoritarianism to democracy.Amity Business School Features of Global Economy – Transition Economies – refers to economies which are in transition from centralized economic system to the market economy. 34 .
overall improvement in economic welfare. innovation and fast diffusion of ideas and technology. open trade and investment policies. standard of living. competition and consumer choice. Human Poverty Index. economic development. characteristics of working conditions. – UNCTAD: Human Development Report (Human Development Index. composition of output. distribution of income. market friendly economic policies. Gender Development Index) – Use of sophisticated technology. dominance of tertiary and secondary sector in income and employment generation.Amity Business School Features of Global Economy • Characteristics of Developed Economies – Income. democratic rights. growth. 35 .
36 . clothing. shelter.Amity Business School Features of Global Economy • Characteristics of Developing Economies – Low income. • Sense of voicelessness and powerlessness in the institutions of state and society • Vulnerability to adverse shocks and inability to cope with them. health and education. inequality in income distribution – Dimensions of Poverty – as highlighted by poor include: • Lack of income and assets to attain basic necessities – food.
37 . between different regions of a country particularly if country is vast and culturally diverse. Nations – It WAS common to consider a nation as economic unit.Amity Business School Features of Global Economy • Region vs. – There are vast differences in economic conditions and other factors relevant to business.
– There are 4 developing countries among the 12 largest economies of the world.Amity Business School Features of Global Economy • Growing Economic Power of Developing Countries – The economic growth rate and the export growth rate of developing economies is significantly higher than that of the developed economies and the trend is expected to continue. • Growing regional integration??? 38 . – Overall good performance of the developing countries has been mainly because of the impressive performance of a small number of them. – A number of developing economies have a trade surplus with developed countries.
– – – – International Investment and Production Cross-border M&As Economic Integration & Trade Pacts Transplants • It refers to transplanting production facilities in foreign markets instead of exporting products manufactures in home country. 39 .Amity Business School Features of Global Economy • Factors Promoting Global Economic Integration – International Trade • Foreign trade (Exports and Import)/ GNP ratios – Production Sharing/ Global Sourcing • Production Sharing refers to practice of carrying out different stages of manufacturing a product in several countries. – Business Strategies • Licensing and Franchising and International Strategic Alliances.
• There is general feeling that the present international economic order is biased against the developing economies.Amity Business School International Economic Gap • The term International Economic Gap refers to the wide economic disparity between the developed and the developing nations.etc. • Some reasons for persistence and widening of the economic gap are: – Differences in growth rates – Unequal access – Population explosion. • The economic and living conditions have improved a lot in the last century. 40 . However. the distribution of these global gains is unequal.
41 . growth rates. share of trade. share of foreign investments. etc. • OECD has – 19% of global population – 71% global trade in goods and services – 60% FDI • Global M&A’s are concentrating industrial power in megacorporations – at the risk of eroding competition. corporations and countries. resources and wealth among people. • Within the group of developing countries there are wide disparities in per capita income levels. • Global commercial bank lends a major share to developing nations.Amity Business School International Economic Gap • There has been increasing concentration of income.
– The demand for NIEO assumes that the current international economic order is unfair. 42 . • NIEO (New International Economic Order) – It refers to a set of demands to ensure that the developing countries get a fair. equal and considerate deal in the international economic system.Amity Business School International Economic Gap • Inclusive global democracy is needed in which all countries – small as well as large should have a voice in decisions.
• Definition • Characteristics • Location • Land Use and Natural Resources • Level of Technology • Principle economic Activity 43 .Amity Business School Tasks to be completed… Q1) Compare Developed and Developing Countries w.r.t.
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