question archive 1)(a) It is argued that import substitution is a misguided trade policy if the intent is to promote long-term economic growth
1)(a) It is argued that import substitution is a misguided trade policy if the intent is to promote long-term economic growth
Subject:EconomicsPrice: Bought3
1)(a) It is argued that import substitution is a misguided trade policy if the intent is to promote long-term economic growth. Identify five reasons for the assertion and offer detailed explanations for each of the reasons you identified. [1 page, 30 points].
(1)(b). The consensus today is that import-substitution protectionist industrial policy has not served the developing countries' growth ambitions well. This fact proves that policies relying on export-driven growth are the "winning ticket" for these countries. Offer sound economic thinking on why the import-substitution failed and why export-driven strategy seem to have won the day [1 page, 30 points].
(2)(a). If there are internal economies of scale, why would it ever make sense for a firm to produce the same good in more than one production facility? [1 page; 30 points].
2(b). Most firms in the apparel and footwear industries (labor-intensive) choose to outsource production to countries where labor is abundant (primarily, Southeast Asia and the Caribbean) – but those firms do not integrate with their suppliers there. On the other hand, firms in many capital-intensive industries choose to integrate with their suppliers. What could be some differences between the labor-intensive apparel and footwear industries on the one hand and capital-intensive industries on the other hand that would explain these choices? [3/4 page; 20 points].
(3). Brazil and Mexico have both liberalized trade since the 1980s. However, Mexican trade liberalization has gone much further; Brazil is still a fairly inward-looking (import-substitution driven) economy. What might account for this difference in paths? [Note: Your essay should include detailed analysis of NAFTA and Mercosur] [1.5 pages; 40 points].
(4). It’s widely believed that self-driving vehicles will become commonplace in the fairly new future and that their growth will be fast for years to come. Doesn’t this mean that the United States should have policies (for examples, subsidies including the possibility that the auto industry may be characterized by monopolistic competition) designed to ensure that we are a leader in the self-driving car industry? How does the lack of such a policy compare with China, South Korea, and selected countries in the EU (Note: you will need to do some research on this question in addition to the material in the text)? [1.5 pages; 50 points].
