INTERNATIONAL ECONOMICS
2024 - 2025
This summary work, which addresses the topic of international economics, is based on the lecture materials from
the course International Economics, taught by Daniele Verdini at the Faculty of Business and Economics at the
University of Antwerp.
1
,PART 1: stylized facts and gravity
LECTURE 1: intro
1. This course
Reasons for heterogeneous prices across countries
● import duties (eg. Brazil has high import duties on international products, so higher price)
● GDP → the higher the GDP of a country, the higher the salary people get
2. Globalization stylized facts
Some basic facts
● China is the largest exporter of goods
● the United States is the largest exporter of services
● the trade-to-gdp ratio of the US is 25%, while the trade-to-gdp ratio of Belgium is 200%
○ larger countries tend to have less international trade
○ a lot of goods pass through the port of Antwerp, raising the Belgian ratio
→ goods that are further transported to other countries are registered too
● the Ivory Coast is the largest exporter of cocoa beans and Brazil is the largest exporter of coffee
→ importance of climate and resources
● Shanghai is busiest container port in the world, and Rotterdam is busiest in Europe (Antwerp 2nd)
→ importance of geographical location
● pharmaceutical products is Belgium’s top export category
Based on these facts, we can see that economic size, population, climate, geography and development levels matter
for trade.
Globalization is not only about moving goods around the globe , but also about people moving.
● in the US, most Tweets are in English of Spanish, but also a lot of other languages are present
● when people move, goods will move too, so migration is a boost for change in the demand pattern
→ eg. Italian guy moves to Belgium, so pasta consumption in Belgium increases
Globalization includes
● flow of goods
● flow of services
● flow of finance (financial assets)
● flow of people
● flow of data and communication
In general, trading is beneficial because it allows a country to offer its citizens more goods and a larger variety of
goods.
2.1 Graphs and figures
Western European exports by region of destination
● export from Western Europe to Western Europe represents the biggest area
→ after WWII, Europe became more integrated because barriers were removed
● during WWII, export to all destinations dropped
2
,Merchandise exports by continent of destination, from India
● around 1980, Pakistan became liberated so export increased since then
● biggest part of export is to Asia, and smallest part is to Europe
→ importance of geographical location and economic power
○ location: you ask questions to your neighbour rather than to the person across the room
○ power: you ask course notes from someone you know and trust
Share of global exports by income level of the trade partners
● high-income trade is going down
● low-income to low-income trade is going up
○ recent wave of globalization has integrated the countries that are different
○ competition from developing countries (reason why Trump put tariffs on China)
3
, The decline of transport and communication costs relative to 1930
● 80% reduction in sea freight cost since 1930
● decrease since 1940, caused by containerisation revolution
Growth of GDP and trade, 1945 to 2014
● positive relation between growth of GDP and trade
○ causality: opening trade implies larger economic growth
● correlation between growth of GDP and trade is independent of population size
→ size of dots represents the size of the population
2.2 What about recent trends?
Composition of exports and imports between different regions
● trade in CIS (Commonwealth of Independent States) is almost flat and at the bottom
● Asia is doing well in terms of export
● heterogeneity between regions both in terms of export and import
4
2024 - 2025
This summary work, which addresses the topic of international economics, is based on the lecture materials from
the course International Economics, taught by Daniele Verdini at the Faculty of Business and Economics at the
University of Antwerp.
1
,PART 1: stylized facts and gravity
LECTURE 1: intro
1. This course
Reasons for heterogeneous prices across countries
● import duties (eg. Brazil has high import duties on international products, so higher price)
● GDP → the higher the GDP of a country, the higher the salary people get
2. Globalization stylized facts
Some basic facts
● China is the largest exporter of goods
● the United States is the largest exporter of services
● the trade-to-gdp ratio of the US is 25%, while the trade-to-gdp ratio of Belgium is 200%
○ larger countries tend to have less international trade
○ a lot of goods pass through the port of Antwerp, raising the Belgian ratio
→ goods that are further transported to other countries are registered too
● the Ivory Coast is the largest exporter of cocoa beans and Brazil is the largest exporter of coffee
→ importance of climate and resources
● Shanghai is busiest container port in the world, and Rotterdam is busiest in Europe (Antwerp 2nd)
→ importance of geographical location
● pharmaceutical products is Belgium’s top export category
Based on these facts, we can see that economic size, population, climate, geography and development levels matter
for trade.
Globalization is not only about moving goods around the globe , but also about people moving.
● in the US, most Tweets are in English of Spanish, but also a lot of other languages are present
● when people move, goods will move too, so migration is a boost for change in the demand pattern
→ eg. Italian guy moves to Belgium, so pasta consumption in Belgium increases
Globalization includes
● flow of goods
● flow of services
● flow of finance (financial assets)
● flow of people
● flow of data and communication
In general, trading is beneficial because it allows a country to offer its citizens more goods and a larger variety of
goods.
2.1 Graphs and figures
Western European exports by region of destination
● export from Western Europe to Western Europe represents the biggest area
→ after WWII, Europe became more integrated because barriers were removed
● during WWII, export to all destinations dropped
2
,Merchandise exports by continent of destination, from India
● around 1980, Pakistan became liberated so export increased since then
● biggest part of export is to Asia, and smallest part is to Europe
→ importance of geographical location and economic power
○ location: you ask questions to your neighbour rather than to the person across the room
○ power: you ask course notes from someone you know and trust
Share of global exports by income level of the trade partners
● high-income trade is going down
● low-income to low-income trade is going up
○ recent wave of globalization has integrated the countries that are different
○ competition from developing countries (reason why Trump put tariffs on China)
3
, The decline of transport and communication costs relative to 1930
● 80% reduction in sea freight cost since 1930
● decrease since 1940, caused by containerisation revolution
Growth of GDP and trade, 1945 to 2014
● positive relation between growth of GDP and trade
○ causality: opening trade implies larger economic growth
● correlation between growth of GDP and trade is independent of population size
→ size of dots represents the size of the population
2.2 What about recent trends?
Composition of exports and imports between different regions
● trade in CIS (Commonwealth of Independent States) is almost flat and at the bottom
● Asia is doing well in terms of export
● heterogeneity between regions both in terms of export and import
4
