International trade models in Argentina and Salvador

International trade models in Argentina and Salvador

This is an assignment that focuses on the analysis on the international trade models in Argentina and Salvador. The paper consists of two separate reports and also required tasks.

The international trade models in Argentina and Salvador

Assume that you are an economic consultant hired by an international organization/government to provide your expert advice on conditions pertaining to international trade in Argentina and El Salvador. Your analysis will consist of two separate reports (one for Assignment 1 and the other for Assignment 2). As an expert, your job is two-fold:

1. Firstly, you are required to analyse any relevant issue using your technical skills. This involves utilizing your knowledge in international trade models as well as inspecting and interpreting data. 2. Secondly, you need to communicate your results in an effective way. The purpose of this exercise is to assess your aptitudes in each domain. You will evaluate the trading conditions in these countries (Argentina and El Salvador) based on the scenarios detailed in each question in this Assignment. Your analysis will form the basis for a short report to the international organization/government body— summarising your analysis and also the associated rationale.

II. DATA SOURCE For your data analysis, you first need to obtain data from the World Bank (see the link below) and follow the steps described below. Notice that World Bank regularly updates its database; therefore it is crucial to obtain all data as soon as possible. The data range is from 1998 to 2014. Additionally, you need to obtain the country-level data for Argentina and El Salvador on:

i. Imports of goods and services (in current US$) ii. Exports of goods and services (in current US$) iii. GDP (in current US$) iv. GDP per capita (in current US$) v. GINI Index (World Bank estimate) from the World Bank’s World Development Indicators:  (http://databank.worldbank.org/data/reports.aspx?source=world-development-indicators). [Note that if your browser (such as Chrome) does not open the web page, try a different browser (such as Internet Explorer)] Please DO NOT attach Excel files to the brief. The policy brief needs to be precise and short. Avoid unnecessary jargon. Your policy brief cannot exceed two pages

REQUIRED TASKS

Your tasks involve two dimensions. Firstly, you need to analyse the data (see Steps 1, 2 and 3 in the next section). Secondly, you need to perform a technical analysis by considering a hypothetical trading environment based on Ricardian model (see Step 4 in the next section).
Accordingly, you are to:
 Subsequently, provide information about how integrated these two countries (Argentina and El Salvador) are with the rest of the world. To do so, you need to look at their trade flows relative to their GDP and calculate openness.  Provide a visual representation of your findings by plotting a graph (use line graph) that shows the change in openness for these countries over the period between 1998 and 2014 (including all years, i.e., 1998, 1999, …, 2014).

Lastly, establish whether being integrated with the rest of the world helped these two countries by looking at the correlation between their openness and also GDP per capita.  Conjecture what would have happened if these countries were not open to trade with the rest of the world by evaluating a hypothetical scenario based on a simple Ricardian model.