RECAP: TRADE, IMMIGRATION AND EXCHANGE RATES IN A GLOBALIZED WORLD

Well done, you have finished the second course,

in this specialization on globalization economic growth and stability.

The second course was trade,

immigration and exchange rates in a globalized world.

Here, we moved into some topics,

that really grab headlines today.

We talked about trade and how trade benefits all nations that are involved in it.

That it's not a soccer game or a zero sum game but it's a win-win game,

where both sides can benefit from

specializing and exchanging the goods that they produce best,

and the globe, the world gains in terms of efficiency.

We looked at exchange rates,

we saw how they were determined in free markets,

how they move up or down,

we talked about six different factors that can

cause them to move and then a couple of special situations.

Then we discovered that governments can manipulate those.

So, we thought about what that meant and how that could be done,

and we talked about how exchange rates affect an economy,

what happens when they go up?

What happens to your GDP?

What happens to your inflation?

What happens when they go down?

Then finally, we turn to probably the most controversial topic in this course,

which is full of controversial topics, which is immigration.

We discovered, maybe to some of our surprise,

that immigration has a net beneficial effect on the country that sends the immigrant,

but especially on the country that receives the immigrant.

We talked about some of the elements of this debate,

and why it has become such a political touch point now,

in today's debates, in today's political life,

and what may be could be done to reduce the opposition to

immigration to make immigration policies work better for everybody in the economy.

We also looked at the balance of payments,

this becomes an important tool for us going forward,

because we want to understand what kind of risks there are in countries that

have current account surpluses and countries that have current account deficits.

I tried to convince you,

that it's a very simplistic way of

looking at the world to think a country where the surplus is better,

more competitive, more virtuous,

whatever you want to think and a country with a deficit is a country with a problem.

I tried to convince you,

and I hope I succeeded,

that there are risks associated with deficits,

and there are risks also associated with surpluses.

We're going to dig into these risks,

as we move forward in this specialization and

look at countries and look at the kinds of risk because of

the opportunities that this kind of data point out for investors in different countries.

So, we're going to move on now,

to the second part of the capstone.

For this specialization you'll have a quiz and then we will be doing

an exercise with real data to review these concepts up in the real world.

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