Theories of trade flows between nations
Describe the different theories that explain trade flows between nations. Discuss the implications that international trade theory has for business practice.
Different theories that explain trade flows between nations
Real Estate Industry in Australia
Firstly, Describe the different theories that explain trade flows between nations
Secondly, Discuss the implications that international trade theory has for business practice
Thirdly, Describe the policy instruments used by governments to influence international trade flows
Fourthly, Discuss the range of policy instruments that governments use to influence FDI
What Is International Trade?
International trade theories are simply different theories to explain international trade. Trade is the concept of exchanging goods and services between two people or entities. International trade is then the concept of this exchange between people or entities in two different countries.
People or entities trade because they believe that they benefit from the exchange. They may need or want the goods or services. While at the surface, this many sound very simple, there is a great deal of theory, policy, and business strategy that constitutes internationally.
In this section, you’ll learn about the different theories that have evolved over the past century and which are most relevant today. Additionally, you’ll explore the factors that impact international trade and how businesses and governments use these factors to their respective benefits to promote their interests.
What Are the Different International Trade Theories?
“Around 5,200 years ago, Uruk, in southern Mesopotamia, was probably the first city the world had ever seen, housing more than 50,000 people within its six miles of wall. Uruk, its agriculture made prosperous by sophisticated irrigation canals, was home to the first class of middlemen, trade intermediaries…A cooperative trade network…set the pattern that would endure for the next 6,000 years.”Matt Ridley, “Humans: Why They Triumphed,” Wall Street Journal, May 22, 2010, accessed December 20, 2010, http://online.wsj.com/article/SB10001424052748703691804575254533386933138.html.