INTRODUCTION TO INTERNATIONAL ECONOMICS
Topic 1.2
Definitions of trade terms
· GNP (the World bank calls this GNI)
· GDP
· Exports/imports
· Index of openness
· Trade deficit/surplus
· PPP
· Exchange rate
· Terms of Trade
Stylized facts/empirical regularities
· Large economies tend to be more closed
· Most trade is between developed countries
· World trade has grown much faster than GDP since 1950
· Barriers to trade have fallen since 1950
· Asia’s share of world trade has increased
· Gravity models predict trade very well
· Fast growing countries tend to be open
· Most trade is in inputs and intermediate goods (like parts)
· Services are 20 per cent of trade
