International Flow Of Goods And Capital - 978 Words

As transportation and technology rapidly develops, the globe is connected more closely. As the corollaries and aspects of globalization, international flow of goods and capital, and migration are more and more frequent. There are some people hold positive attitude towards both practices which tend to promote countries to use what they are abundant of in exchange of what they lack. So some people think those who support free movement of goods and investment among states are supposed to like immigration. However, since global movement of products and investment boosts the international economy while immigration can cast threats on domestic people, many people favor trade liberalization and overseas investment but oppose immigration. Some people may argue that people’s attitude towards international movement of goods, capital, and labor should be consistent. That is to say, people who favor global trade on goods and capital should also prefer immigration. People who oppose intern ational flow of goods and capital ought to oppose immigration too. These people base their argument on Heckscher-Ohlin approach which states that â€Å"a country will export goods that make intensive use of the factors of production in which it is well endowed’ and import what it lacks (Frieden, Lake, Schultz, 2010, p. 270). For example, a country that is rich in natural resources but scarce in labor, such as Australia, will export more of its natural resources and attract labor to work in its country.Show MoreRelatedExplain How the International Trade Flows Should Initially Adjust in Response to the Changes in Inflation (Holding Exchange Rates Constant).645 Words   |  3 PagesAssignment #1: The International Financial Environment. Explain how the international trade flows should initially adjust in response to the changes in inflation (holding exchange rates constant). 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