Note: Sample below may appear distorted but all corresponding word document files contain proper formattingExcerpt from Research Paper:
Earlier studies based on Bretton Woods data were only refuted because the data sets of the later studies were insufficiently long. It may be, therefore, that Himarios is one of many that will now be able to demonstrate that long-term equilibrium is possible. It may that it requires nearly at least three decades' worth of data and a multi-country study in order to see the equilibrium emerge, meaning that previous theories were simply not taking into consideration the time frames that would be required for production, wage and policy shifts to be implemented and have their impact on a nation's balance of trade.
Himarios' findings do suggest that externalities cannot be maintained. While a single government can maintain consistent economic policy for decades seemingly regardless of the consequences (Cuba or North Korea, for example) a free economy cannot. Eventually a trade deficit will result in a workforce demanding jobs, for example, leading government to reduce trade barriers or lower the value of its currency. A persistent surplus will result in an overheated economy. China is not yet priced into the stratosphere, but it is becoming priced out of reach of many Chinese. Such a situation can be predicted to eventually lead to civic unrest, which would again spur the removal of externalities. The argument to be made, then, is not whether externalities can be maintained forever -- they cannot -- but for how long they can be maintained. The answer to this question, given the examples post-World War Two, appears to be in the decades. The longer the externalities are sustained against the forces of basic economies, the bigger will be the collapse.
For many years, economists had found that trade balance equilibrium was not achieved through exchange rate fluctuations alone. This hinted that if such equilibrium were probable, it would come about only as the result of a confluence of multiple factors. The externalities that cause the disequilibrium in the trade balance will eventually need to be unwound. While for years, evidence of long-term equilibrium under free currency floats could not be validated, in recent years evidence has begun to emerge supporting the idea of trade balance equilibrium. This is not unreasonable, considering the types of externalities that need to be adjusted in order to bring about a state of equilibrium. Exchanges rates are just one -- consumer spending patterns, wages, trade policy and other factors all impact the balance of trade. The process of adjusting all of these requires a much longer frame of time than had perhaps been originally believed. More evidence should arrive in the coming years in support of long-term trade equilibrium -- it will be interesting to see if this materializes because it appears that only know are we able to gather sufficient information since the advent of free floating currencies regarding trade equilibrium.
Ahmad, J. & Yang, J. (2004). Estimation of the J-curve in China. East-West Center Working Paper. No. 67, 2004. Retrieved March 31, 2010 from https://scholarspace.manoa.hawaii.edu/bitstream/10125/3706/1/ECONwp067.pdf
Akbostanci, E. (2002). Dynamics of trade balance: The Turkish J-Curve. Economic Research Center. Retrieved March 31, 2010 from http://www.erc.metu.edu.tr/menu/series02/0205.pdf
Backus, D., Kehoe, P., Kydland, F. (1994). Dynamics of trade balance and the terms of trade: The J-curve? The American Economic Review. Vol. 84 (1) 84-103.
Bahmani-Oskooee, M. & Niroomand, F. (1998). Long-run price elasticities and the Marshall-Lerner condition revisited. Economics Letters. Vol. 61 (1) 101-109
Baldwin, R. & Krugman, P. (1986). Persistent trade effects of large exchange rate shocks. NBER Working Paper No. 2017. Retrieved March 31, 2010 from http://www.graduateinstitute.ch/webdav/site/ctei/shared/CTEI/Baldwin/Publications/Chapters/Trade%20Theory/w2017.v5.pdf
Himiaros, D. (2007). Do devaluations improve the trade balance? The evidence revisited. Economic Inquiry. Vol. 27 (1) 143-168.
Krugman, P. & Baldwin, R. (1987). The persistence of the U.S. trade deficit. Brookings Papers on Economic Activity. 1: 1987.
Mahmud, S., Ullah, a. & Yucel, E. (2004). Testing Marshall-Lerner condition: A non-parametrical approach. Applied Economics Letters. Vol. 11 (4) 231-236.
Rose, a. (1991). The role of exchange rates in a popular model of international trade: Does the Marshall-Lerner condition hold? Journal of International Economics. Vol. 30 (3-4). 301-316
Samuelson, P. (1964). Theoretical notes on trade problems. The Review of Economics and Statistics. Vol. 46 (2) 145-154[continue]
"Trade Balance The Concept Of" (2010, April 28) Retrieved October 22, 2016, from http://www.paperdue.com/essay/trade-balance-the-concept-of-2398
"Trade Balance The Concept Of" 28 April 2010. Web.22 October. 2016. <http://www.paperdue.com/essay/trade-balance-the-concept-of-2398>
"Trade Balance The Concept Of", 28 April 2010, Accessed.22 October. 2016, http://www.paperdue.com/essay/trade-balance-the-concept-of-2398
4 trillion to about $5 trillion dollars at the end of 2008 to support a rise in U.S. net external debt from $3.3 trillion to $7.4 trillion. (Ibid. 6) Continued financing of the U.S. trade deficits by the rest of the world is also not without its long-term problems: the U.S. would accumulate so much debt over time that the ultimate cost of adjustment would become too high for the
Balance Sheet Question/Statement: Select either the balance sheet or income statement and explain how the use of it may be applied to your everyday life. The balance sheet may be applied to everyday life in that it can be used to assess past performance, as well as to plan for future undertakings. If, for example, an individual used one's birthday as the balance sheet statement date, then the balance sheet would show
The other implication is the impact of the balance of payments on the business. The negative balance of payments represents an outflow of wealth, which slows domestic economic growth. The U.S. becomes less competitive as a result. For most companies, this places downward pressure on costs. In many cases, the downward cost pressure results in offshoring, which exacerbates the balance of payments deficit. Griswold (1999) argues that this is beneficial
Chang and Young (1995) points that the process of measuring performance give an organization an opportunity to have focus, projections, common understanding as well as quality knowledge to enhance good decision making process in any organization. It also helps organizations to have a mechanism of getting feedback on the improved efforts of service delivery. In addition to this due to the fact that measurement of performance is closely related to
International Trade Theories International trade may be classified as the trade of capital, goods, and services across international boundaries or areas. In many nations, such trade signifies a substantial share of the country's gross domestic product (GDP). While international trade continues to be present throughout a lot of significant research for trade history (see Silk Road, Amber Road), the fact remains that the over societal, economic and political importance for international
Trade Agreements and Negotiations on International Trade International Trade Trade is important to countries all around the world. International trade opens up job opportunities and also leads to development of economic activity in every region of the trading country. The trading countries must also ensure that traders, whether self-employed entrepreneur, corporate executive or pensioner must bear the responsibility of making sure that goods and services are transported efficiently to global markets.
However, in recent years the country has experience economic growth by changing the old way that it did business and moving to more modern techniques. Ireland was able to transform its sluggish economy by moving away from the industrial base that it was used to for so many years to high-technology specialization (Garcimartin et al., 2008). This shows that there is truth to Thirlwall statement tying slow growth to a