Ekonomi Internasional - 2 - Teori Perdagangan Internasional

Summary

This video explores key concepts of international trade theory, focusing on classical trade theories like Mercantilism, Absolute Advantage, and Comparative Advantage. It explains how Mercantilism viewed trade as a zero-sum game, aiming for a trade surplus through export-heavy policies. It then shifts to Classical Trade Theory, which argues that trade can be mutually beneficial based on the relative advantages each country has in producing goods. Using a case study of Indonesia and the U.S., the video demonstrates how specialization and trade can increase overall production and benefit both nations.

Takeaways

• 😀 International economics consists of two branches: international trade and international finance.
• 😀 The main objectives of international trade theory are: explaining the benefits of trade, identifying trade patterns, and analyzing the impact of trade policies.
• 😀 International trade theory can be categorized into two broad types: classical theory and modern theory.
• 😀 Classical trade theories, such as mercantilism, absolute advantage, and comparative advantage, emerged between the 16th and 19th centuries.
• 😀 Mercantilism, popular in Europe between the 16th and 18th centuries, focused on accumulating wealth through gold and silver, encouraging protectionism and colonialism.
• 😀 Mercantilism was criticized for causing trade wars, inefficiencies, and social-political issues due to excessive protectionist policies.
• 😀 Classical trade theory, developed in the 20th century, introduced the idea that trade could be mutually beneficial based on differences in factor endowments.
• 😀 Adam Smith's theory of absolute advantage posits that if one country can produce more of a good with the same resources, it has an absolute advantage in that good.
• 😀 The example of Indonesia and the United States illustrates how specialization based on absolute advantage can lead to increased total output through trade.
• 😀 Trade leads to greater efficiency and higher output (gains from trade), as countries specialize in producing goods where they have an absolute advantage and trade for other goods.
• 😀 The pattern of trade between countries depends on their specialization, with each country exporting what it produces more efficiently and importing what it doesn't produce.

Q & A

What are the three main objectives of international trade theory?

The three main objectives of international trade theory are: 1) Explaining the benefits of trade, referred to as 'gains from trade,' 2) Understanding the patterns of trade, and 3) Analyzing the effects of trade policies or interventions.

What is the difference between classical and modern trade theories?

Classical trade theories, developed from the 16th to the 19th century, focus on the factors of production and economic models of trade, such as mercantilism, absolute advantage, and comparative advantage. Modern trade theories, which began developing in the 20th century, include models like Heckscher-Ohlin, product life cycle, and the Porter Diamond Model.

How did mercantilism influence trade policies during the 16th to 18th centuries?

Mercantilism promoted the idea that national wealth was measured by the amount of gold and silver a country had. This led to trade policies focused on maintaining a trade surplus (exports > imports), implementing protectionist measures such as tariffs, import quotas, and subsidies for local industries, and establishing colonies to secure resources and markets.

What were some critiques of mercantilism?

Critics of mercantilism highlighted several issues, including the inefficiency of resource allocation, the social and political problems associated with colonialism, and the risk of trade wars. For example, countries like England and the Netherlands imposing retaliatory tariffs on each other led to high prices for imported goods and inefficient production.

What is the key concept behind Adam Smith's absolute advantage theory?

Adam Smith's theory of absolute advantage suggests that if a country can produce a good more efficiently than another country using the same amount of resources, then it should specialize in the production of that good. This allows for mutual gains when countries trade based on their absolute advantages.

What is the difference between absolute advantage and comparative advantage?

The key difference is that absolute advantage focuses on the ability of a country to produce more of a good with the same resources, whereas comparative advantage, as proposed by David Ricardo, emphasizes the ability of a country to produce a good at a lower opportunity cost than another country, even if it doesn't have an absolute advantage.

How do absolute advantage and comparative advantage both rely on the assumption of labor as the sole factor of production?

Both theories assume that only labor is required for production, simplifying the analysis. This assumption ignores other factors like capital, land, or technology, making the models easier to understand but less reflective of real-world complexities.

What is the concept of 'gains from trade' illustrated in the absolute advantage model?

The 'gains from trade' concept refers to the increased total output and consumption that can occur when countries specialize in producing goods in which they have an absolute advantage, then trade with each other. This leads to a higher combined production of goods and services compared to when countries produce everything themselves.

In the example of Indonesia and the United States, how does specialization lead to more efficient production?

In the example, Indonesia specializes in rice production due to its tropical climate, while the U.S. specializes in wheat production due to its subtropical climate. By focusing on the goods they can produce more efficiently, both countries increase their output. Indonesia produces more rice and the U.S. produces more wheat, leading to overall higher production and mutual benefits from trade.

How do trade patterns emerge from the absolute advantage model?

Trade patterns emerge based on countries' specializations. For example, Indonesia would export rice to the U.S., while the U.S. would export wheat to Indonesia, as both countries are focusing on producing the goods in which they have an absolute advantage.