Manipulate economic models to analyze real world issues in international trade. Manipulate economic models to analyze real world issues in international trade. Analyze the fundamental determinants of the size and pattern of trade to verify its determinants and its effects on the wider economy/welfare. Compare and contrast economic and political conditions in poor and rich countries to critically assess the incentives and consequences of trade liberalization globally. Assess the impact of protectionist policies on the welfare in rich and poor countries to decrypt the political economy of trade reform.
In the first assignment, you motivated a story about comparative advantage. In this section you will talk about trade and inequality. You will then address the relationship between comparative advantage and inequality in a short conclusion.
To answer the assignment questions first get the data follow these steps.
1. This assignment requires you to obtain data from one country (1) of your choosing.
2. Obtain country-level data on trade (% GDP) from the World Bank’s World Development Indicators (http://databank.worldbank.org/data/source/world-development-indicators).
3. Obtain data on industrial pay inequality difference from UTIP-UNIDO (http://utip.gov.utexas.edu/datasets.html).
4. DO NOT attach Excel files to the assignment.
5. Keep explanations brief. Policy analysis in applied economics has to be brief. Be precise and to the point, avoid jargon.
Manipulate economic models
1. Using data plot openness versus Industrial Pay Inequality (from UTIP-UNIDO) for the nation. IT’S UP TO YOU TO FIGURE OUT HOW TO DO THIS. (10 marks)
2. Calculate the correlation (using excel) between openness and Industrial Pay Inequality (from UTIP-UNIDO) for the nation. Report and interpret this relationship in approximately 300 words. [Hint: Correlation can be calculated using the CORREL function: https://support.office.com/en-us/article/correl-function-995dcef7-0c0a-4bed-a3fb-239d7b68ca92. The Theil Index is used as a proxy for the ratio of skilled to unskilled wages in empirical studies]. DO NOT ATTACH YOUR DATA TO THE ASSIGNMENT. (8 marks)
3. Explain carefully in approximately 500 words whether your data agrees or disagrees with the Stolper-Samuelson Theorem. (Remember to accurately define the theorem and discuss how it applies to your country). (6 marks).4. Conclusion: In 200 words explain how comparative advantage is linked to inequality in the country that you’re studying? (5 marks).