The external trade teachings (also international trade relations) are a subsection of the political economy. It is concerned with all questions, which are connected with the transnational traffic of goods, persons, services and capital. It uses there the statements and theories of the and

Partitioning

The external trade theory is divided today into three strands: the material (goods-economical) theory, the monetary theory and the theory of economic integration. The material external trade is the traditional principal item of the external trade teachings (why it is designated in older text books also than "“pure external trade"”). It is concerned with the foreign trade market and the there relevant sizes of ex and import.

In particular by the collapse of the Bretton Woods system however monetary aspects won a far stronger meaning in the last decades. The monetary external trade therefore since the 1960ern as the second important support leg the external trade theory developed. It examines the foreign exchange market (and there in particular the rate of exchange). Both beginnings stood for a long time to a large extent unconnected next to each other.

As the newest strand of the external trade teachings in the last decades, in particular however into the 1990er years theories developed to questions of the economic integration. They link material and monetary external trade and represent today in the public at most considered strand of the external trade.

A separate field of knowledge are so e.g. economical aspects of the external trade teachings, the preparation and completion of export trades, the security against rate of exchange, economic and political risks.

Goods-economical (material) external trade theory

Foreign trade theories

Major item foreign trade theory

The goods-economical theory is concerned with the causes of the foreign trade. This comes to conditions

• if goods are not available in a country, (e.g. Germany imports bananas)
• special preferences for foreign goods exist (import of French Champagner)
• Countries over different cost advantages order.

Adam Smith assumed still foreign trade is worthwhile itself only with the presence of absolute cost advantages. David Ricardo (1772-1825, English political economist) showed however that also a country, which has at all goods absolute cost advantages can draw nevertheless use from the foreign trade, if it uses its komparativen cost advantages.

Quintessence of these considerations is that specialization and foreign trade increase the welfare of all countries. This applies at least then, if on the world markets an exchange ratio of term OF trade develops, with which both sides profits. However the advantages from the foreign trade are attached at acceptance, which are in practice not so easily fulfilled. Thus it is assumed that factors of production are flexibly applicable in the countries involved that thus a country, which e.g. loses its advantages in the area of the agriculture, which employed workers there easily in industries begin can, which have advantages in the foreign trade. Also the specialization can lead to Monokulturen, whereby countries become dependent on a product and term OF trade to develop to be able itself, which is no longer favourable for the country; from this problem many developing countries suffer.

Commercial policy and protectionism

Although a free world trade favours the prosperity of all national economies according to the theory of the komparativen costs, moved and countries seize protectionist measures for the restriction of the trade. That is among other things because of the fact that the advantages of the free trade for the particular are not consciously noticed by this, while the disadvantages meet often small groups (in Germany e.g. the mountain workers) very hard, which articulate accordingly loud their interests.

Traditional instruments of a strategic commercial policy are tariffs, contingents and export subsidies. One calls these also barriers to trade. Not measures e.g. possess in addition, great importance like self-restraint agreement, foreigners discriminating regulations and standards or bureaucratic regulations. (Border impacts, harbour dues, health and safety regulations, subsidies and other subventions, import-discouraging laws"…)

Order of the world trade

After the Second World War the re-organization of the world trade generally began 1947 with the establishment tariff and trade agreement HOLE. Within its framework eight rounds of negotiations took place, in which the tariffs were world-wide lowered. The respected round (so-called Uruguay round) ended with the establishment of the world trade organization World Trade Organization.

Monetary external trade theory

While in the center of the goods-economical theory physical rivers of goods and services are located, the monetary theory regards those the appropriate money stream and refers also international capital traffic also.

Representation of the foreign trade in the balance of payments

Definition framework for the illustration transnational money and of the flows of capital is the balance of payments. This is altogether seen always balanced, since all unequal weights become balanced by the central bank in the long run, their foreign exchange reserves to change accordingly. Of a balanced balance of payments one, if the foreign exchange reserves do not change, speaks thus the foreign exchange balance is balanced. Instruments to balance of payments reconciliation are the rate of exchange and the interest.

Rate of exchange and foreign trade

The classical acceptance of the monetary external trade teachings is that the offer and the demand on the foreign exchange markets result alone from the foreign trade: Export your release foreign exchange and offer them, importers need for the payment of their calculations foreign exchange and inquire them. If the rate of exchange forms freely after supply and demand, then unequal weights in the balance of payments affect the rate of exchange, and the rate of exchange affects again the balance of payments. (With firm rates of exchange the adjustment is made by the inflation rates). If a country has a surplus in the balance of payments, the offer on the foreign exchange market exceeds the demand, the course of the foreign currency turns out under pressure and/or the domestic currency revalues.

A revaluation of the domestic currency raises the price of however export, so that, a price standard price of the demand are presupposed, inquired abroad fewer export goods, export thus to sink. Import goods become simultaneous more cheaply, so that the imports rise. Thus the surplus in the balance of payments is reduced. This only simplifies shown argumentation here was it, the end of the sixties, when the Bretton Woods system of firm rates of exchange broke down, the demand after flexible rates of exchange to become loud left.

However the balance of payments is affected to a considerable degree by flows of capital, which react also to rates of exchange, in addition, by interest differences, growth expectations etc. to be affected.

International currency regulations

Still during the Second World War at a conference in Bretton Woods the re-organization of international currency regulations into the ways led with establishment of the International Monetary Fund (IWF) and its sister organizations World Bank and international bank for reconstruction and development (IBRD). The rate of exchange relations between the IWF members was regulated by the Bretton Woods system, which was characterized in relation to the dollar by firm of rates of exchange of all member countries, to which again a gold standard applied. When the system at the beginning of the seventies broke down, that developed European monetary system in Europe, in which the strongly interlaced countries of the European union agreed upon among themselves firm of rates of exchange.

Task of the IWF is today above all the monitoring of the stability of the currencies of their members (Surveillance) and the grant of interim credits, in order to avoid monetary crises. However the IWF members pursued occasional informal rate of exchange goals, so e.g. 1985, when they stopped in concentrated action an extraordinarily strong revaluation dollar and 1987, when they terminated the case dollar.

Articles in category "External trade"

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