Trade Liberalization Literature Review

Many experts and economists argue whether immigrants bring more benefits or disadvantages for the economy of the country they’re immigrating to. However, even though there are indeed some disadvantages, the benefits of immigration to the economy are more than enough to make up for the costs. Immigrants benefit the economy of the country they’re immigrating to in terms of increasing the gross domestic product, tax revenues, and contribution to innovation. Immigrants are affecting the economic growth in the United States of America. Immigrants come from many different places and as it causes cultural diversity,

Regulations that the government implement, licensing for example, increases the barrier of entry into the market and decreases ways for the traders to gratify consumer demand. This case is prevalent in the monopoly market. The market is sometimes best to decide how much and what to produce since it has better information and knowledge of the consumers compared to the government. Economic decisions may also not be competent when the government is motivated by political power rather than economic imperatives. Sometimes, economic policies are designed to retain power rather than to ensure maximum efficiency in the economy.

i) Trade liberalization promotes free trade between countries by removing tariffs and non-tariff barrier on the exchange of goods. The reduction of tariff and non-tariff barriers includes tax charged on imported goods, licensing rules, quotas and other requirements (1). Trade liberalization benefits a nation by lowering price for the scarce resources which enables domestic firms to create more products and foster economic growth. The other advantage is that countries involved in free trade can specialize in production based on comparative advantage for goods. From academic research of rapid development in Asia around the 1990s; the reduction of trade barrier and growth showed positive relationship.

As before, as the population increases with immigration, the labor supply would also increase, but the increased population would also lead to increased consumer spending and demand (i.e. money flowing into the US economy). When this new shift is taken into consideration, the labor demand would need to also increase to accommodate the new consumer demand. Thus, the change to wage rates would be subject how much labor supply and labor demand shift; a larger shift in supply over demand leading to decreased wage rates and vice-versa. Consequently, the resulting outcomes from immigration could be positive, negative, or neutral towards economic factors.

In this sense, authoritarianism has its own advantage as it can draw and execute policy beneficial to economic development without facing the objection from citizens. State can then make policy which are less favourable to citizens but beneficial to economic development, for example, country may adopt an economic contractionary policy in order to save enough money for future investment. Although the policy cause decrease in demand and have negative

The continuous imposition of trade barriers between two or more countries leads to a trade war between them. However, barriers on trade are not only heavily frowned upon because of their adverse effects on international relations but also due to them playing a

Outsourcing directly contributed to job loss domestically, with 2.9 million people were put off work during 2001 to 2009. (Lerman & Schmidt, 1999) Employers relocate their industries overseas to enjoy lower cost of cheap labors and avoiding paying payroll taxes or social security. With less financial flow in the industrial stream, national tax base has been impaired. National income declines, so the government is lack of revenue to consolidate social welfare and public services, which has resulted in dramatic drop in people’s average living standard and quality of life. Taking America’s comparative advantage of high-end technology and human resources into consideration, one may easily find that the nation will leave its low-end and limited skilled productions and human resources to oversea market to boost productivity and maximize profitability at the same time.

Authors adds threshold values of total credit to the private sector and deposit money bank assets, above which the total effect of remittance on growth is positive. Azam and khan (2011) Running the linear regression of two remittance receiving and same features countries i.e. Azerbaijan and Arminia. They empirically proves that workers remittance are significant for the acceleration of growth in the field of study. Recommending to formulate the policies and encouraging to utilize more efficiently in order to improve society living standard.

Along these lines, unemployment may decrease, as this has different favorable circumstances, for example, lower government using on profits and less social issues. However, this phenomenon includes a number of different expenses. Firstly, if economic growth is unsustainable and is higher than the long run pattern rate, inflations are liable to be seen. An increase in economic growth could prompt an equalization of issued installments. In case the expanded customer expenditure causes further development, there will be an increase in the import sector.

The free movement of capital has substantially contributed to facilitate Foreign Direct Investment activity within, to and from the Single Market. The freedom of movement of capital makes it easier and more attractive to invest in other European companies and increases European firms’ ability to invest in other member states. Forslid (2014) notes that the implementation of the single market led to increased flows of Foreign Direct Investment within the EU – national firms, previously protected by various trade barriers, sought to maintain their market positions. Such investments are likely to improve production efficiency through enhanced possibilities for large scale production. Moreover, Eastern European countries that have joined the EU and the single market have been able to attract foreign capital to a greater extent than non-EU countries in Eastern Europe.

As for the cons, it is said that the redistribution of income or wealth goes against what the American economy stands for in a sense of a free capitalism. It is sort of the opposite of the pros in a way. You see when redistribution is taking place, big businesses and the wealthy are unable to create businesses, and hire. It acts as a cinder block in a way that it can bring the economy down. One last note regarding cons is that many despise redistribution because they feel they are forced to give their hard earned money away and that it promotes laziness even.

This can result to more stable economic growth and higher overall tax revenue. List of Cons of a Flat Tax 1. It favors the wealthy. Those who are earning bigger income can enjoy paying less tax, so they end up with more money, further widening the gap between the wealthy and poor. 2.

Globalization has many negative effects in our world. The first problem with globalization is that international trade is exacerbating income inequalities between industrialized and nonindustrialized nations. Secondly, Global commerce is dominating the corps that want to maximize profits without a regard for the development of the country. Lastly, the countries involved with globalization lower their environmental standards in order to attract foreign business investments. In order to reform globalization, the government should change the ‘rules’ because they are unequal.