International Economics

These are relative terms because, strictly speaking, all factors are scarce. Relative factor abundance implies that an economy has more of a particular factor in relation to some other factor and by comparison to another economy. Relative factor scarcity impolies the opposite.

A foreign-based operation that is owned by a firm in the home country.

A trade theory that predicts the goods and services that countries export and import .The theorem states that countries will export goods that require the intensive use of relatively abundant factors to produce, and import goods that require relatively scarce fctors to produce.

International trade between two or more divisions of the same company that are located in different countries.

The idea that a rise or decline in goods prices has a larger effect in the same direction on the income of the factor used intensively in its production.

The movement of some or all of a firm's activities to a foreign country.

A model of the determinants of foreign direct investment that is based on the key variables Ownership-Location-Internalization

Outsourcing is the shifting of procurement from within a firm to outside a firm. It is often used to refer to services that are purchased abroad, such as the procurement of business services in India by a firm based in Europe or the United States.

The idea that manufactured goods go through a cycle of heavy research and development requiring experimentation in the product and the manufacturing process, followed by stabilization of design and production, and a final stage of complete standardization.

The economic and/or political problems caused by an abundance of one valuable natural resource such as petroleum.

Members of a migrant's family or village that provide support in the migrant's new location.

A trade model that allows for mobile and immobile factors of production.

A corollary of the Heckscher-Ohlin Theory stating that changes in import export prices lead to a change in the same direction of the income of factors used intensively in production of the imported or exported good.

The factors that "push" migrants out of their home country (see also Demand-pull factors)

The price of a good minus the value of intermediate inputs used to produce it. Value added measures the contribution of capital and labor at a given stage of production.

The purchase of physical assets such as real estate or businesses by a foreign company or individual. It can be outward (citizens or businesses in the home country purchase assets in a foreign country) or inward (foreigners purchase assets in the home country). (See also foreign portfolio investment.

The market value of all final goods and services produced in a year inside a nation.

A numerical limit on the volume of imports.

Agreements between two or more countries, each offering the others preferential access to its markets. RTAs provide varying degrees of access and variable amounts of deep integration.

The elimination or reduction of tariffs, quotas, and other border-related barriers (such as customs procedures) that restrict the flow of goods across borders. (see also Deep integration)

Taxes imposed on imports. Tariffs raise the price to the domestic consumer and reduce the quantity demanded.

The ratio of exports plus imports to GDP; often used as an indicator of the relative importance of international trade in an national economy.

A regional trade agreement whose member nations allow the free movement of inputs as well as outputs, and who share a common external tariff toward nonmembers.

A small town in New Hampshire that was, in July 1944, the site of talks establishing the international financial and economic order after World War II. The International Monetary Fund and the World Bank emerged from the Bretton Woods Conference.

The policy of customs unions in which the members adopt the same tariffs toward nonmembers.

An agreement among two or more member countries to engage in free trade with each other and to share a common external tariff toward nonmembers.

The name for the trade negotiations that began in 2000 undder the auspices of the World Trade Organization.

The current WTO round of trade negotiations. (See Doha Development Agenda)

The most complete form of economic integration, these unions are common markets that also harmonize many standards while having the same or substantially similar fiscal and monetary policies. Economic unions may include a common currency.