HowInternational Economics Impacts My Life: Professionally and Personally.” Youwill need to use a minimum of 10 academic journal articles published within thelast 5 years to support your arguments...

How International Economics Impacts My Life: Professionally and Personally
In today’s world our lives are increasingly being impacted by the events happening around the world. International economics seeks to understand the economic activities in light of the differences of productive resources, consumer preferences and international institutions across different economies. It tries to analyze the patterns and the consequences of the transactions and interactions between the people of different economies including trade, investment and migration. Hence it directly affects both our personal as well as professional lives. It is generally considered that international integration through trade and direct investment promotes economic growth. Individual’s personal and professional life is dependent on the well-being of the nation which in turn depends on the productivity and economics conditions prevailing in the economy. Hence in this essay I will try to understand the implications of international economics on the individual’s life through the impact of international economics on the economic growth of a country.
International economics deals with the interaction among several economies. International economics deals with several aspects like (1) the gains from trade, (2) the pattern of trade, (3) protectionism, (4) the balance of payments, (5) exchange rate determination, (6) international policy coordination, and (7) the international capital market.
Gains from trade
One of the most important concept associated with the international economics relates to the notion of gains from trade that is, when countries sell goods and services to each other, this exchange is almost always to their mutual benefit. The standard of living of a nation depends on its productivity. A higher productivity implies higher levels of national income implying more employment opportunities. According to Ferreira and Trejos (2011) international trade impact the Total Factor Productivity (TFP) and trade facilitates efficient allocation of resources across sectors and thus impacting the aggregate productivity. An empirical research by Feyrer (2009) concludes that an increase in trade volumes of 10% implies an increase in real income of 5%. Another work by Feenstra (2009) argues that there are gains from trade in the market structure characterized by monopolistic competition. Under such kind of market structure gains from trade arises because of availability of imported varieties to the consumer enhancing the consumption basket of the individual consumer. Secondly, trade in such a situation enhances productivity as more productive firms begin exporting and less productive firms exit which helps in changing the structure of the economy and alternating the employment opportunities. Finally he argues that there are gains from trade because of reduced markups charged. As Krugman (1979) pointed out that reduced markups combined with zero profits in equilibrium imply that firms are moving down their average cost curves, taking greater advantage of economies of scale. This eventually leads to reduction in consumer prices benefiting the consumers.
Pattern of trade
Another important concept related to international economics is comparative advantage. A country has a comparative advantage in producing a good if the opportunity cost of producing that good in terms of other goods is lower in that country than it is in other countries. Comparative advantage initiates countries to trade through specialization. Modern research shows that contracting and legal institutions of a country can also formulate its comparative advantage. Tang (2012) explains that workers have an added incentive to acquire firm-specific
skills compared to general skills when the labor markets are more protective. He shows that countries with more protective labor laws would tend to specialize in firm specific skill intensive sectors and would export goods related to industries for which firm specific skills are more important. One such example is Sweden which is a country with protective labor laws, and hence exports more from firm specific skill-intensive sectors than the U.S., a country with flexible labor laws.
Protectionism
A large part of international economics tries to understand the impact of protectionist policies of different governments and show the benefits of free international trade. Bakhshi and Kerr (2010) investigate the rational of including labor standards in international trade agreements. They consider the view points of the producers from protectionism aspect as well as point of view of the consumers and...