Explain how trade/GDP (also called openness) is a measure of globalisation

Explain how trade/GDP (also called openness) is a measure of globalisation

Understand how to use data in practical analysis and learn how to write brief reports and policy briefs.

This assessment is linked to the following Course Learning Objectives (CLOs):

  • Manipulate economic models to analyse real world issues in international trade.
  • Analyse the fundamental determinants of the size and pattern of trade to verify its determinants and its effects on the wider economy/welfare.
  • Compare and contrast economic and political conditions in poor and rich countries to critically assess the incentives and consequences of trade liberalisation globally.
  • Assess the impact of protectionist policies on the welfare in rich and poor countries to decrypt the political economy of trade reform.

 

Details:

To answer the assignment questions first get the data follow these steps.

  1. This assignment requires you to obtain data from two (2) countries of your choosing over the period 1985-2005.
  2. Obtain country-level data on trade (% GDP) and GDP per capita (constant 2010 US$) from the World Bank’s World Development Indicators (http://databank.worldbank.org/data/source/world-development-indicators(Links to an external site.)Links to an external site. (Links to an external site.)Links to an external site.).
  3. DO NOT attach Excel files to the assignment.
  4. Keep explanations brief. Policy analysis in applied economics has to be brief. Be precise and to the point, avoid jargon.

Questions

  1. Explain how trade/GDP (also called openness) is a measure of globalisation.
    Are there other measures you could use?
    What form of globalisation are you measuring? (5 marks)
  2. Using 2 graphs (one for each country), plot openness versus time for each country. Explain in up to 50 words how openness has changed for these countries from 1985 to 2005. Make sure your graph is properly labelled. (5 marks)
  3. Explain in up to 100 words the relationship between openness and economic development by calculating the correlation coefficient between GDP per capita (proxy for economic development) and openness for each of the two countries, respectively. [Here you have to use the CORREL command in Excel]. DO NOT ATTACH YOUR DATA TO THE ASSIGNMENT. (10 marks)
  4. Explain in up to 200 words the factors that you think drive openness in these two countries. [Note that these factors can be positive or negative]. If you use information, reference it. References do not count in the word count. (5 marks)

*** Follow the instructions above on how to get the data.
*** Read Chapter 1/Lecture 1 of the textbook very carefully.

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