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Payments and Finance in International Trade - Essay Example

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Trade Liberalization revisits the empirical evidence on the relationship between economic integration and economic growth. First, there are several openness indicators and trade liberalization dates for a wide cross-section of countries in the 1990s. Second, the extent of the Sachs and Warner (1995) study of the relationship between trade openness and economic growth to the 1990s, discusses recent criticisms of their measurement and estimation framework…
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Payments and Finance in International Trade
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Download file to see previous pages In sharp contrast to the results, we find that liberalization has, on average, robust positive effects on growth, openness and investment rates within countries. We have some examples of Trade Liberalization (Arnold, 2007).
The payment instruction was subsequently misplaced on the desk of a clerk at Mega Bank and accordingly the relevant accounting entries for crediting Alpha's account were not made by Mega Bank, and Alpha was not notified that payment from Delta had been received. On July 5th, Delta instructed its bank, Grand Banque in Paris, to make a funds transfer to Alpha's account at Mega Bank in London to be credited on or before July 7th. On the morning of July 6th, in order to effect the payment, Grand Banque debited Delta's account and simultaneously sent payment instructions via SWIFT to its correspondent bank in the UK, Royal Bank PLC, instructing it to make an inter-bank transfer to Mega Bank in sterling for credit to Alpha's account on or before close of business on July 7th. Royal Bank went ahead and sent the payment order to Mega Bank on July 6th, with instructions to credit the account of Alpha on or before close of business on July 7th.
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Alpha is frustrated that it has not yet been paid and advises Delta on 8th July that it is no longer liable to perform under the contract (Balamurugan and Madhura, 2002).
Many of the hurdles to international trade took the shape of high tariffs on imports of manufactured goods. The typical aim of such tariffs was to protect domestic industries from foreign competition. On consequence, however, were "beggar of neighbor" retaliatory trade policies with countries progressively raising trade barriers against each other. Ultimately, this depressed world demand and contributed to the Great Depression of the 1930s.
This event was the boom that woke the world up but it was not the only reason that led to liberalization. People begun to realize that their basic necessities were not satisfied because they are not available in their home country or too expensive because of the imposed tariffs. They also realized that they will gain advantages through engaging in international trade, like improving their living standard and satisfying more needs (Brennan and Cao, 1996).
If the country is going to export, it will need to expand it output which means more people will be hired and living standard will improve.
Moreover when removing tariffs imposed on imported goods that my country doesn't produce, people will be able to purchase them at reasonable prices therefore satisfying more needs.
The developed countries realized that even if they have comparative advantage in some products, they should specialize in the production of those goods that it produces most efficiently and to buy the goods that it produces less efficiently from other countries, even if this means buying goods from other countries that it could produce more efficiently itself (Brinblatt, ...Download file to see next pagesRead More
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