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按一下以編輯母片標題樣式,按一下以編輯母片,第二層,第三層,第四層,第五層,oct.12,06,*,*,Lecture 4:Openness and Growth in Different Perspectives,II.,Globalization:Blessing or curse?,1.Trade and Growth,oct.12,06,1,Discussion:10/5,Case Study:,China,“China:the worlds factory floor,”BBC News;,Monday,11 November,2002,http:/news,.bbc,.co,.uk,/1/hi/business/2415241,.stm,“Is China a goldmine or minefield?”BBC News;Thursday,19 February,2004;,http:/news,.bbc,.co,.uk,/1/hi/business/3494069,.stm,“The OECD on Chinas economy:A model of reform”Sep 15th 2005,from the Economist print edition,Economic Survey of China 2005,Published by OECD on 16 September 2005,(See the syllabus from the course website),oct.12,06,2,Homework:Essay one,Prepare to write a report on them,TOPICS:,China:Facing the 21st Century,Due:OCT.19,References,Workers Face Uphill Battle on Road to Globalization,by Joseph Kahn,I,nternational,Herald Tribune,1/27/04,Money for Nothing and Calls for Free,by,Nidhi,Kumar and,Nidhi Verghese,CorpWatch,2/17/04,oct.12,06,3,Essay one,China:Facing the 21st Century,China is currently the most dynamic force in Asia;it may be the most dynamic force in the world.Moreover,if China continues along its present trajectory,its growth will inevitably change the face of Asia or even the world.How did China do this?Where is China heading?,oct.12,06,4,Theoretical backgrounds:traditional view,Trade theory:Comparative Advantage suggests gains from trade;Ex:Jordan and Jennifer,Figure 1:How Free Trade Affects Welfare in an Open Economy,p,A,p,W,PC,Wine,PPF,oct.12,06,5,經濟學家的人文省思,Stiglitz,Joseph E.,2003,“Globalization and growth in emerging markets and the New Economy.”,Journal of Policy Modeling,25:505524.,How globalization harms growth in developing countries without adequate management?,Job loss,Risk,Capital flows growth effect,Capital flight,Monetary policy independence,Domestic political equilibrium,Social capital,oct.12,06,6,Job creation?Job loss?,Stiglitz,:Participating in globalization and resulting export growth do not promise more jobs for a poor country.,Do capital and technology flow from rich countries to poor countries?e.x.FDI,Can new jobs created faster than old jobs eliminated?ex.the Mexico article,Need to find out fundamental factors affecting job creation!No simple rule.,oct.12,06,7,Why is Openness important?,Exports?FDI?,Both can generate growth,employment and productivity(due to tech spillovers),International economists argue that the true reason is“imports”,exports are a means,not an end,oct.12,06,8,Why is Openness important?,Importing ideas,Importing ideas include,:,How to organize a business,production process?,How to target new products with latent demand and how to manufacture them?,Ability to import ideas is of particular advantage to countries that lag behind the tech frontier,oct.12,06,9,Why is Openness important?,Importing goods and services,Importing investment goods,(equipments of,fab,),LDCs,lack comparative advantage in capital goods,trade protection,high relative price,low real investment,Importing intermediate goods(Intel,cpu,),LDCs,-no local supply of specialized intermediate inputs low productivity of manufacturing firms,oct.12,06,10,Why is Openness important?,Importing capital:source of gain for,LDCs,Capital-poor,LDCs,high rate of return to capital,investment and growth,Smooth consumption when crop failures,natural disasters,or temporary TOT decline,Households can diversify their portfolios and achieve a better mix of risk and return,oct.12,06,11,New theoretical argument:New Trade/Growth theory,Trade benefits by,Larger markets economics of scale,Importing tech productivity,Imperfect competition/,Increasing returns,Trade-growth;,Large dynamic gains from trade,oct.12,06,12,How to exploit the dynamic gains?,intensified competitive environment spurs global economic progress,Globalization,Market liberalization,Technological change,Investment+new mgmt techniques+training=,productivity increases,Economic growth,Low inflation,Full employment,Competition,A New Economy,oct.12,06,13,Problems in importing capital,Moral hazard and adverse selection excessive lending for risky projects,Mismatch between short-term liability and long-term assets bank runs and financial panic,Asset values are determined by expectations about future returns bubbles in asset prices,(we will talk about this later),oct.12,06,14,Problems in importing capital Risk,Stiglitz,:globalization may increase risk,Risk more volatile prices,risk premium,;cost of capital,investment and growth,No help in stabilizing macroeconomy;short-term capital flows are pro-cyclical,oct.12,06,15,Problems in importing capital capital flight,Cases:Russia,Mexico,Russia:loan-for-share privatization,A few oligarchs bought up state assets at a fraction of the market value,in particular,lacked political/legal legitimacy.,Business operators may choose to capital fight when Russia economy going down,Mexico:exchange rate;real wealth effect;production;financial system;bankruptcy,oct.12,06,16,Further discussions,Domes
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