Final Blog Post

Many parts of the material covered in this class were review, such as supply and demand, GDP, and exchange rates. However in other economics classes, I never really learned about the importance of transportation and how cities can be modeled according to the central place theory. The most important thing I learned was that economics and all things in life are not black and white. When discussing trade, it is not just sending a good from point A to point B. The good has to be transported in different ways, trade barriers may play a role, exchange rates must be taken into account, and there are other numerous variables that must be considered. 

I am interested in learning more about the international business and economics. Learning about economics domestically is interesting in itself, but it is fascinating how when applied internationally, the models are the same, but the variables that effect them are even more important. 

The most challenging thing about next year will be planning for life after college. I may only be a junior, but I will need to figure out what jobs I need to look for after college and whether or not I want to go to graduate school. In addition to this, figuring out a SIP and an internship for my junior summer will also be challenging in itself. 

City Analysis

Berlin is Germany's largest cities and lies at the top in the hierarchy of central places. Berlin does not have one central business district. There are several smaller districts. Property in Berlin is among the least expensive in Germany and has housing suitable mostly for the upper and middle class. Demand for luxury homes has consistently increased since the unification of West and East Berlin. The most desirable are located in the deco buildings and have prestigious architectural features. Centrally located luxury apartments are also very popular. Mitte, Prenzauler, and Charlottenburg are some of the popular districts to live in. Borse Berlin is the Berlin Stock Exchange. This feature is something that would only be found in large cities. In addition, Berlin contains large quantities of restaurants, stores, and other businesses that may not be found in other smaller cities. Because Berlin is Germany's largest city, there are not many goods or services that are unavailable and it has advanced infrastructure, a strong industrial presence, and a couple million residents.

Blog Post

In chapter five, the author discusses the rate of development of China and India and the role U.S. steel has played on that development. China imports more steel than India because it is easier for the United States to ship the goods at a lower transportation cost. India, however, is a farther trip and has more transportation costs. In addition, China has historically been a key trade partner of the United States and has had a greater industrial presence in the global economy than India. India does not have the same resources as China and its location could have played a role in its slower development. This is similar to "Why did Human History Unfold Differently On Different Continents the For the Last 13000 Years." China continues to have the greater means to develop than India has. The resources, climate, and geography in China have contributed to its success. India is located in the middle of Asia and before the development of modern transportation, it was very difficult to import goods from countries such as the United States. Without access to steel from the United States, industrializing and the development that results was more challenging.

"The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger" Discussion

"For workers, of course, this has all been a mixed blessing. As consumers, they enjoy infinitely more choices thanks to the global trade the container has stimulated. By one careful study, the United States imported four times as many varieties of goods in 2002 as in 1972, generating a consumer benefit--not counted in official statistics--equal to nearly 3 percent of the entire economy. The competition that came with increased trade has diffused new products with remarkable speed and has held down prices so that average households can partake. The ready availability of inexpensive imported consumer goods has boosted living standards around the world.²

As wage earners, on the other hand, workers have every reason to be ambivalent. In the decades after World War II, wartime devastation created vast demand while low levels of international trade kept competitive forces under control. In this exceptional environment, workers and trade unions in North America, Western Europe, and Japan were able to negotiate nearly continuous improvements in wages and benefits, while government programs provided ever stronger safety nets. The workweek grew shorter, disability pay was made more generous, and retirement at sixty or sixty-two became the norm. The container helped bring an end to that unprecedented advance. Low shipping costs helped make capital even more mobile, increasing the bargaining power of employers against their far less mobile workers. In this highly integrated world economy, the pay of workers in Shenzhen sets limits on wages in South Carolina, and when the French government ordered a shorter workweek with no cut in pay, it discovered that nearly frictionless, nearly costless shipping made it easy for manufacturers to avoid the higher cost by moving abroad."

This section was by far the most interesting largely impart to its economic implications. A great debate among economists is whether or not productivity or employment should be the priority and the case of the container is the epitome of this debate. Consumers benefited from having more goods available at a cheaper price. This occurred because it was easier for foreign goods to be shipped abroad. The average worker, however, lost power in debating wages due to the greater competition. It was interesting to see how a simple container can have such a mixed impact on the world economy. 

The author saw the development of the shipping container as a contribute to globalization because it allowed more goods to be shipped around the world faster and cheaper. Although it is not a direct form of transporting goods, it does make the shipping easier. As more goods traveled around the country, the global economy became more competitive and companies were able to expand their markets worldwide. 

Consumers will benefit from this globalization because prices become cheaper and a larger variety of goods is made available for purchase. Business owners also benefit because they can expand their markets and produce and transport goods at a cheaper price. Being confined to a single location once prevented trade, but containers contributed to increased trade around the world. 

News Article

In Germany, business officials are encouraging political elites to ease sanctions against Russia. This has discouraged German Chancellor Angela Merkel from advocating more extreme penalties. The promotion of these sanctions has grown as the crisis in Ukraine has become more serious. Many of Germany's largest companies operate in Russia and tough sanctions could negatively impact one of their largest markets. President Barack Obama plans to broaden the sanctions and Merkel plans to meet with American officials to avoid this. 

Many other countries including Italy, Greece, Egypt, and Japan also have hesitations in increasing sanctions against Russia, fearing the negative impact they could have on their respective economies. One third of German gas and oil is imported from Russia and "there is no question that Germany's economic interests would be best served by avoiding sanctions". It will be interesting to see in the coming weeks whether or not sanctions against Russia will lengthen over the coming weeks as the crisis in Ukraine continues. Determining what is best for both the world and the global economy will continue to be a challenge for the world leaders. 

http://online.wsj.com/news/articles/SB10001424052702303948104579535983960826054

German Transportation

Germany has numerous ports at or around the North Sea. The North Sea is the major waterway with which German trade occurs. Major port cities include Brake, Bremen, Bremerhaven, Cuxhaven, Emden, Hamburg, Leer, Nordenham, Oldenburg, Pepenburg, and Wilhelmshaven with Hamburg being the largest.

Deutsche Bahn is the major German railway infrastructure and service operator and although it is privately owned, the government owns all of its shares. Many cities in Germany have operating metros including Berlin, Hamburg, and Munich. The InterCityExpress is a high speed train system that runs through Germany and neighboring cities such as Copenhagen, Brussels, Amsterdam, and Paris. Germany has approximately 650,000 km of roads. Federal roads are called Bundesstraben. The roads are recognized by numbers and the more important roads usually have low numbers. Odd-number roads usually apply to north-south routes and even-number roads represent east/west routes.

Frankfurt International Airport is the largest airports in Germany and one of the top-ten in the world. Munich and Berlin's airports are respectively the second and third largest airports in Germany. Germany has 320 airports with paved runways and 295 airports with unpaved runways.

Germany International Trade

Germany is the third largest exporter and importer in the world. In 2013, Germany recorded the world's highest trade surplus at about $260 billion. In 2012 the value of exports was recorded at $1.492 trillion. Germany's primary exports are motor vehicles, machinery, chemicals, computer and electronic products, electrical equipment, pharmaceuticals, metals, transport equipment, foodstuffs, textiles, rubber and plastic products. The European Union accounts for 58.2% of Germany's total exports, followed by United States (7%), China (6.1%), and Switzerland (4.5%). The value of imports in 2012 was $1.276 trillion. Primary imports include machinery, data processing equipment, vehicles, chemicals, oil and gas, metals, electric equipment, pharmaceuticals, foodstuffs, agricultural products. The European Union is the primary import partner (58.2%), followed by China (8.9%), U.S. (5.5%), and Switzerland (4.2%). 

The currency of Germany is the Euro. The current exchange rate between the U.S. dollar is: $1= 1.38 Euros. This means that the U.S. goods are cheaper to purchase abroad and cheaper to import. In addition, German goods are more expensive for Americans traveling to Germany. Since the financial crisis, the Euro has consistently been worth more than the U.S. dollar.

Germany has the third largest percentage of migrants world wide at 5%. Most of the immigrants come from other European countries including: Poland, Romania, Bulgaria, Hungary, Italy, Spain, and Greece. Many Turkish people migrate to Germany, but Turkish Germans immigrating to Turkey is greater than the former. 

Throughout the first half of the 20th century, Germany was at conflict with the world. It was the primary instigator in both World War I and World War II. After the fall of Nazi Germany, Germany was split into East and West Germany with the former communist and the latter democratic. After the fall of the Berlin Wall in 1989 and the end of the Cold War, German relations with other countries have been relatively stable and it has been established as an economic superpower.