Article's summary in (international economic field) - Essay Example

Articles on International Economics Article Land of the corporate giants The article en d “Land of corporate giants” which is published online in The Economist presented economic issues that tackled a closer look at economies of scale, the cost function, the ‘winner’s curse’, and the ‘empire-building’ theory through looking at business organizations that apparently get bigger. The initial discourse compared the effectiveness of applying the economies of scale concept among container ships and buildings.

As disclosed, “since the shipping cost per container keeps on falling as ship size rises, container ships are set to keep growing” (Land of the corporate giants par. 2). However, using buildings as an example, it was evident that the economies of scale seem to become inapplicable up to a certain extent where the construction of higher buildings apparently becomes more costly and inefficient. In cases of large organizations, the article revealed that organizations that have continued to expand through mergers and acquisitions could only be evaluated in terms of viably realizing economies of scale through the concept of the cost function.

As noted, the relationship requires the need “to estimate how output levels influence the costs of production in a competitive industry” (Land of the corporate giants par. 6). However, due to differences in inputs and outputs as determined by the kind of industry some organizations are categorized in, the cost function is a challenging way to gauge the applicability of economies of scale. Overall, large organizations have been reported to justify continued merger and acquisitions by the ability to limit and restrict competitors and to dictate market prices.

Article 2: IMF warns of threat to global economies posed by austerity drives The article “IMF warns of threat to global economies posed by austerity drives” written by Elliot and published online in The Guardian presented issues that have been recommended by 11 international leaders headed by the International Monetary Fund (IMF) with a recommendation of boosting much needed global economic growth. As revealed, the current practices exemplified by different developed countries focus on protectionism and trade barriers which do not encourage international economic expansion.

As indicated, after reviewing the economic indices and thrusts exhibited by various governments, it was evident that more focus was centered on “decelerating global growth and rising uncertainty; high unemployment, especially youth unemployment, with all its negative economic and social consequences; potential resort to inward-looking protectionist policies” (Elliot par. 4). Being overly zealous on these issues would apparently be more detrimental to international economic development. As recommended, the 11 international leaders who monitor financial and economic developments across global spheres emphasized that what is crucial is addressing unemployment, investing in human capital, and refurbishing funds to banks to spur investment and economic activities.

Policymakers around the world are thereby enjoined to take a more proactive stance in the creation of jobs, and in ensuring that tight financial policies and regulations are enhanced to prevent the loss of confidence in the financial and economic systems and to ultimately focus on international economic growth.Works CitedElliot, Larry. "IMF warns of threat to global economies posed by austerity drives." 20 January 2012. The Guardian. 13 November 2012 ."Land of the corporate giants." 3 November 2012.

The Economist. 13 November 2012 .