International Economic Systems

by

Michael Witt, Jack Helmuth, Christopher Kelly

• LAST REVIEWED: 01 March 2023
• LAST MODIFIED: 26 April 2018
• DOI: 10.1093/obo/9780199846740-0079

Introduction

This international economic systems article addresses the global trade literature that covers a range of disciplines including economics, international finance, accounting, marketing, political economy, and international business. Changes in this area have occurred with dizzying rapidity. By 1973, flexible exchange rates had replaced fixed exchange rates and with monumental impact. The global economy, the development of China as the world’s manufacturing center, the liberalization of India’s economy, the fall of the USSR, the information age, and the development of the European Union are all changes that have accelerated the pace and complexity of international trade. The global environment, the safety of financial institutions, and health and national income disparity remain issues that concern all 196 nations in the world. With this in mind, the citations and texts presented are authoritative and intended to provide an overview of the most important topics, especially modern issues such as Brexit, the hangover from the fiscal crisis of 2008, the effects of democratization and foreign investment, and the consequences of monetary integration. This research tool provides those seeking to learn about, or to expand this field of study, the opportunity to do so in as few steps as possible—and by providing the most meaningful arguments within this subject matter. The support of the University of Michigan-Flint School of Management is gratefully acknowledged. The views and opinions expressed are solely those of the authors, and any errors or omissions are the responsibility of the corresponding author.

General Overviews

By way of introducing a complex topic such as international trade, Helpman 2011 provides a concise, readable introduction. This work covers classical trade theory and advances theory that helps to conceptualize important trade issues for interested citizens and even policymakers. Gopinath, et al. 2014 is current and useful, covering financial crises, sovereign debt issues, capital flows, exchange rates, and comparative advantage issues. Dhingra, et al. 2016 covers the implications of Brexit for the United Kingdom as well as the EU and the global economy.

• Dhingra, Swati, Gianmarco I. P. Ottaviano, Thomas Sampson, and John Van Reenen. “The Consequences of Brexit for UK Trade and Living Standards.” CEP Brexit Analysis No. 2. London: Centre for Economic Performance, 2016.

  Dhingra, et al. provide a comprehensive look at Brexit and speculate as to its possible long-term economic effects and trade-offs on living standards, trade, immigration, foreign investments, and the United Kingdom and the European Union generally, as well as the United Kingdom’s options going forward.

• Gopinath, Gita, Elhanan Helpman, and Kenneth Rogoff, eds. Handbook of International Economics. Vol. 4. Amsterdam: North Holland, 2014.

  Volume 4 provides important advances and contemporary issues in international trade and international macroeconomics since the publication of Volume 3 in 1995. Surveys of eleven topics are provided, ranging from financial crises, sovereign debt issues, capital flows, exchange rates, and comparative advantage issues. The material is accessible and intended for graduate-level and professional researchers.

• Helpman, Elhanan. Understanding Global Trade. Cambridge, MA: Harvard University Press, 2011.

  DOI: 10.2307/1885416

  In an effort to provide an understanding of current events, Helpman provides a concise introduction to trade theory, from the classical theories of Adam Smith to the early 21st century, all in a highly readable form. He discusses classical trade theory and covers topics such as comparative advantage, sources of gains from trade, and distributional conflicts. Helpman anchors much of his material with quantitative reasoning that reflects contemporary methodology. Contemporary issues such as outsourcing, growth of the multinational company, unemployment issues, and offshoring are provided.