International Trade
Refresher reading access
Introduction
From an investment perspective, it is important for global investors to understand existing trade policies. Such policies can affect the volume and value of trade and thus can affect the return on investment. Investors need to be aware of potential changes in the government’s trade policy. Such changes have important implications for firm profitability and growth by affecting the demand for its products and its pricing. There has been much debate among economists on the role of trade and trade policy and its impact on the overall economy. This learning module examines the benefits and cost of international trade. It then describes trade restrictions and their implications and discusses the motivation for, and advantages of, the different types of trading blocs or trade agreements.
Learning Outcomes
The candidate should be able to:
- describe the benefits and costs of international trade
- compare types of trade restrictions, such as tariffs, quotas, and export subsidies, and their economic implications
- explain motivations for and advantages of trading blocs, common markets, and economic unions
0.75 PL Credit
If you are a CFA Institute member don’t forget to record Professional Learning (PL) credit from reading this article.