Trade, as it has already been presented in the title, belongs to the most influential as well as fundamental elements of each economy. It is connected with the fact that there is no country, which would have all of miscellaneous products that are inevitable for its progress.
Moreover, it might be possible that a country such as Russia or China can have access to wide range of miscellaneous resources, but the difficulty is that other countries can sell them significantly cheaper. This is so-called relative advantage and is regularly taught on miscellaneous economic universities. The understanding of this tendency has ended up in growing the amount of the exchange of goods internationally.
Even though it may be considered as a quite positive tendency, as there is additional demand for our commodities, we are recommended to also keep in mind that it also has its harmful sides. One of the most crucial is referred to the fact that the countries have never been so dependent on each other as they are these days. This implies that financial crisis in one country is considerably more influential on situation in other state than ever in the past.
To illustrate above mentioned thesis let’s go back to the year 2007, which is known to be the beginning of the economical crisis. The reason why it has begun is related to the fact that the American banks have decreased the safety standards, which resulted in increasing interest on various bank loans. This has resulted in the fact that substantial amount of money was given to people, who were unable to pay the rates, which implied that the supply level of estates in USA has reached top level. This resulted in minimalization of their cost and, owing to series of connotations, it has also considerably impacted the field of trade.
Hence, trade is a topic that is unable to be assessed with one word. It has both positive and negative side, which means that the governments globally should focus on benefitting from the first one and governing the economies in such way that something that happened some years ago would never come back.