Hello, Rory. Hi, how are you? Meanwell? Okay, great. Yeah, go ahead. Go ahead. Sorry, I'm a bit sick. My voice is like this, so kind of not told today, just that my voice is so like I don't like feel that good, but we we we do like he just told through the the points and stuff. Okay, you just tell me quickly then the thing that you're doing in school maybe that you want to cover in particular, is there something in something in particular maybe just came forward off measuenough in particular, so and just just themfour steaful as a whole. Okay, Yeah, it has a bit of macro then. I guess I'm just opened this up. Okay. Okay, good, let's start. So what do you prefer? Micro? Macro actually, really, which one do you wait to do? Matrow? Can you prefer macro as a whole? I mean, as a whole before? Okay, I just download this. So is this sound? Okay, let's start with the same full first bit ID. Okay, fat bit of globalization, right? So globalization rule something. We all kind of we've all heard that one many times before. So globalization is kind kind of been in economics. We think of globalization as part of development as it's big kind of what greatly important for for developments economics to develop as a country. Think of so many countries that have had export led growth that have grown through internationalization in different ways, right? Globalization is not just trade. It's a lot of other things that are more subtle don't get from tourism to accepting students from abroad to soft power through maybe your films, your pop pop culture or any kind of thing or point like that, right? So Yeah, we see globalization is, if we think a China ruory, right? Globalization is definitely has been a big thing for China undoubdly, undoubtedly, right? Why? Because there wasn't some export export market for for China. China would have, I mean, we would have all depended, China, all countries of, we would depend on our own market, own domestic markets development, right? What are the benefits of exporting abroad? I mean, there's many, we think of it for China 40, 30, 40 years ago when it started opening up rassively. They mean the population was not as rich as it is today, right? So having access to foreign countries such as the us, Europe etc., effectively gave it a big market to sell to. And then given it was a good manufacturing partner for many different reasons, it was able to access all these different countries, all these different export markets, right? So that's kind of the point, igment. Compbsation for China has been great, and now we think of the opposite rrory maybe quickly. I don't ask you too many questions, I know, but do you think we're reaching some kind of opposite or some kind of polar opposite of globalization now? What do you think, Rory? Are we reaching some kind of post globalization period now? That just is need globzation. So so if I'm thinking of the tariff wall right and protection right, is this almost like we're knocking down the trend? Isn't the trend is no longer for globalization to grow for all of us that are more integrated are hints not just through trade war, but other bits. Is there some kind of hint towards, Oh, actually we're getting the opposite of globalization now. We're kind of getting the boy where people countries are becoming becoming more iner, more nationalist. Sorry, give it a thing, think of sets of things, maybe certain advice. I don't know what can I guess the biggest is protectionism, right? Does protectionism so tariff, Yeah does that go against globalization? Do you think some kind of notion of integration of everyone coming closer. Yeah, I think so. Yeah. Yeah. It tyally goes against it. Why? Well, why does protectionism go against it? Always? This will be my last question. I've been a little bit. Why do you think it globalize that? Okay. Globalization, yes. Why does protectionism so tariffs go against us? Because they want to keep their own countries proper. They want to like bring back like the facories in their own countries. So like there's no like if you that's terriobviously, the trapes going to decrease. It's basically going against integration, right? So if you look at this protectionism, if the us sets tariffs on Chinese goods or any goods from any country, therebe less exporting, less exporting and importing across the world, less integration. In this sense, we will become a bit more reliant on other trading partners or just reliant on our own domestic production rate. Right. So basically this this is one of the biggest things, and not just the tariffs. Other things have happened. Maybe Brexi think of Brexit. The the uk was part of the club, big club, European Union, right? And then it got to a point where no longer wants wanted to be part of this club, wanted to show, maybe make other lands kind of alliances, find other big trading partners. But in in a way, the uk decided to leave a club, a bigger club, a globalized club, and on its own reand leaving to be one, have left the European Union. This is a big thing. This test, certain and trends to my gloombalization is not as big now. For example, right. Cool. That's kind of globalization is hard as define, but we can think of it as many things, not just export soft power. We've said tourism, being able to work abroad, right? Rory, like I mean, I studying the uk, I worked in London for a tiny bit, worked in China, I mean, now helping Chinese students a lot in mainland China. That's kind of part of the glolives world we live in. I think that wouldn't end up been possible even 30, 40 years ago. Okay. So what effects is contributing to globalization? Clearly, improvement in transportation. I mean, that's pretty obvious. Even if we were very connected and willing to connect, if we weren't able to speak, I wasn't able to speak to, I guess you're in the uk, but most of my students oter mainland China, and we didn't have this ability to speak. This space does communicate to it. For me to go to China sometimes I don't think it have been as easy. It would be so easy. Technology right? Yeah technology. The ability to speak on the fur through I guess that's also part of transportation as well. Issue. I think the law book is vitally important. Trade liberalization. So not having tariffs, at least even with the us tariffs now, it is for sure still very open terms of trade. Historically there are no tariffs in many countries. You can sell to foreign markets pretty easy, okay? And that's a big thing. And then you have the international financial markets, right? So you're able to so countries that are developing like poor are able to access pockets of money. So funding, right, quite easily. They're quite cheap. I think this is an important thing that maybe gets overlooked. And then tnc or big multinational companies, right? I think they have a big role to play as well. So they're the one to really bridge the gap most coming to local domestic really if you think of all companies in the world, multinationals helping is kind of global baggage and internationalization trend again. Okay okay. Good, perfect. So what are the impacts of globalization, Rory? So there's many, right, our consumers on workers governenvironment, so let's think of the impact of globalization on consumers. What's a good thing? Well, you can access many different products, more products, cheaper products, right? Yeah, sure. It's rather cheap products coming into you're even very recently tau and Shane and were we able in Europe? Was that a saying a few years ago? I didn't think so, right? I mean, I not big buyer that, but I know that was something quite big in Europe, right? Able to buy from abroad ad straight from like a Chinese factory almost kind of I guess it's so expensive compared back to China maybe. What do you think? Is it so expensive already compared to China move these temu and Aliexpress kind of. I have no clue. Is it big in China or not? I just I just know it's big in k Yeah. So I mean, these are so it's always been made in China products for the past 20, 30 years, right? And that's the biggest point that I was just saying. It's a bit of a side motor. Now it's not just product gets sent, Ted, but on purpose to Europe and sold in Europe. Now you can I mean, I guess this is not, let's say, in principle, but well, my perception is that with all these like online retailers, economce stores sell thern Europe now Chinese economce stores, the idea is that you effectively gaining access what you didn't gain, didn't have access to before, just directly to Chinese manufacturer buying from then, right? And this is fantastic. It's only really been around for a few years and this will continue, right? We'll continue to differences across the world will continue to decrease. I believe that, look, if you can buy something very cheap in China now, better transportation, better technology, better communication cations, logistics, etc, you should be able to buy very cheap in the uk, well, almost at the same price rate in a few years time, price even closer. Okay. Anyway, so clearly, consumers benefit from lower prices, benefit from being able to improve their lives. They won't go to another country to live, to study, to work, to retire on holiday. This is a good thing. It's also about, I mean, okay, I mean, we now go to workers, right? Not just consumers, but workers. Workers yes, are able to go abroad to work, but can also face negative consequence from immigration to that country, right? So when I was actually in the uk when bresk got voted, and in 2016, I was actually, it was right before I left Cambridge for my first, the first tisummer, because I started in 2015, and in 2016 they voted in June to straight off my exams, but first few Econ exams, and then I was still there that we all kind of had to leave, right, for the summer holiday. And look, the reason why people voted for Breare, many became camerbridge, auin, Oxford and London with three cities. Really, I actually voted to remain, to remain in the European Union for many different reasons, right? But obviously one thing that was noted is that it wasn't necessarily the rich or the elites devoted for Brexit. I mean, probably not at all, was actually the working on class. The working class was thought to kind of be the part of society that was experia lot of negative consequences of immigration, right? They would see Romanian, Bulgaria, poles, these nationalities taking their jobs. Okay. So Yeah, they were coming on a political they saw we can debate if this is or not, but at least it makes basic economic, it makes the path of the it's almost like a logical argument e with economic point. It's the demand on supply of workers, demand of workers that it stays constant where there's more supply rate even with more people coming into the labor market from abroad or no never part of the labor market in the uk demand supply. If supply shifts out roaring, what happens to wages? What happens to wages? Yes, we've got that demand and supply of workers. So demand for workers from companies and supply of workers from workers themselves. If work, if the supply shifts out, what happens to, let's say, average or equilibrium wages? I think. I think Yeah. You draw the supply rate like that, the very standard, right? Supply shifts out. What do you think happens to wages by the way? Wages is on the y axis, right? Yeah. So what do you think happens? The wages they go up or they go down? I think the way ges go up. Do you think so? So imagine it. It's imagine we're both plumbers, okay? And there's an x number of houses in the plumbing services today, right this week, and we go out and we compete against each other. But it's not a last competition ring. Can you take some houses? I think from mother's day, I can't do all of them anyway. Ryou can't do all of them either. So now there's 50 people from Eastern Europe come come along and we'll compete for the same number of jobs, same number of like opportunities to work in different houses. What have inhappen will happen to our wages roaring under this new situation that many more workers competed intuitively? And the way just going to go down if there's like too much competition, exactly. It's just it's deded supply, right? Yeah. Think if demand stays the same, right? So you go on the labor market diagram, we've got wages on the y aferory rate. It's kind of like price and regular about diagram about quantity, okay, there's quantity of labor. Okay, that's something term. It's not like quantity but good, right? Quantity of labor. So supply increases shifts out. The equilibrium wage has effectively dropped, right? Call this W and W one, right? Okay. So people did not like Brexit, some essentially the work and last, not like brexbecause of this, we can think of it as more apparent here in this type of work, right? To look, if you're the finance person working banking or software engineering, maybe or I'm sure you received some pressure in terms of people coming in. Think of these types of workers that were coming from Eastern Europe to countries that were in the eu towards the east of popoland bulk Armenia. I don't think they were competing that much for like software engineering jobs, finance jobs again, but more for like these more basic kind of manual work, right? Okay. And then they were living with these people in their communities. Immigration always causes tension, right? And they probably don't like them. So this is one of the reasons why they voted to leave, right? And also Yeah part of the globalization thing, not so much with work as a labor, our market. Rory, the uk was kind of frustrated at getting dictated by Brussels. So eu is located in Brussels, the majority of the majority constitutions, right? Why is this a foreign power and not like a foreign cosome foreign institution dictwhat we do, right? Why do we have to comply with these foreign people? And you know the British are proud people, right? Like well, why do Europeans have to dictate what we do, right? How why do we get to tell us how much we get to fish in the North Sea by Scotland? That's all waters, that's our country. Like why does why do we have to also comply to some pollution standards that are not our standards, right? Why Yeah, that's what's part of the globalization frustration, globalization and having to comply with some imposed criteria okay okay with regards to work it's okay we should talk about something else as well you've had of the term sweat shop sweat shop right in the poorer countries right? Yeah he out as determined in the sense that the pretty bad light the pretty negative light the idea that labor our standards labour laws are not as powerful a lot of good in certain countries right poorer countries Yeah so there's the I'm not saying this happens all the time, but there are evidence is that in many countries children work below, you know, even less. We've got I don't know, the end 1011 for sure work. The conditions are pretty bad. They're work long now almost lupitaking advantage of everything. So this I guess is part of the negative aspect of globalization, right? Sweatshops, bad kind of labor rights and Stan rights. So that's the thing we can think Kori, is economists as evaluation. Yes, this is terrible. Is this the best, worst outcome? If you, if you may, maybe, but it's still terrible, right? It's terrible that are certain industries that we have in the west, like fast fashion, you know, wanting clothes very cheap, toys, electronics, blah, blah, blah, blaget to get, in fact, somewhere ring. But that hacreate bad situations in these countries, not just sometimes worse, if maybe if they get paid, even if it's not even the minimum wage there, is it better than before? Maybe. But even then, it does cause pollution, does cause resource depletion in these countries, more countries, rwe, probably don't have the power, don't have the funds, the resources to reap, to be able to take care of pollution, to not enforce labor, our laws, environmental laws, etcec to fast them, fast times of industry in these poorer countries. It sometimes hurt them quite a lot in a long run. Okay, what for producers? Rory? I mean, producers is quite obvious. Look, if you can sell somewhere else, not just in your home country, it's quite good, right? It's good news. Yeah, you get to get access to more to bigger marketing. Not only can you start for Chinese producer consult in the us, Spain, France, it's great news. More and more opportunity to increase sales. However, what's a hard look if you're an inefficient fur? Rory, right. A company that's not doing very well, that's not very efficient. It's kind of surviving. We face foreign competition in your country. So for example, Europe, inefficient British firm selling something in London, and now you have Chinese competition ring. They start exporting to the uk. What do you think you feel? Or do you feel here, this inefficient British producer. Who do you feel? I fail. Beyond just about surviving in the uk and your home market. But now you face a lot of competition from China. Low price, the very low prices and the quality ties kind of acceptable. Rancertain, obviously donit's going to have a huge impact on the uk market. Yes, everything is remaining China, right? If you're a uk business is not very efficient anyway. It's just about surviving, right? A now face competition might end up killing you, right? Go out of business. So clearly that's it's two sides to every story, right? So it's good for the consumer, it's good for everyone. I mean, it does bring competition and ultimately it's probably a good thing for you can't produce this anyway. Well, can argue that, but if you're an efficient briproducer just about surviving, this might be the last hyou know the ever take in that might just kill you believe, right? Okay. So firms who are unable to compete on price or quality, which is not very good anyway, will struggle to compete, right? In this international environment, what are government? How does government benefit? Or does government have any potential disadvantages? What do you think about government and globalization, Rory? Thank. Now how does government benefit from globalization? Think of the different facets of globalization, right? And it does it even are there any disadvantages? Maybe. Think so. What does it think? For the governstate. They want to like maybe they want to like put tariff, okay. Okay. Yeah another in other kind of scenarios, what is a good thing the government will value from globalization? Maybe they can set tariffs. But I think globalization kind of the opposite tends to be railing. It's the idea that you don't necessarily want tariffs anymore. You just want more competition or output, more of everything. And that will help the economy more than just collecting tariffs, right? Rowith regards to common and globalization, I mean, think of now right with Trump, but other things the government cares about as a whole, as in general, what does the government care about regardless of globalization or not? Regardless of. Sorry, I still I don't really understand, so to government. You're the movement and then the country starts opening up. Look, if your companies are able to export other countries, this is a good thing. Your exporting companies will make more money, right? Theypay tax abroad, but also pay more tax locally, right? The Chinese government benefits from having strong companies that selling in Europe and America, right? Not just in terms of tax revenue that, you know, they can tax more because the companies ies are making more, but also they employ more workers, right? These companies. So the government is happy that more people are employed simply because government is kind of in charge of society's economy and of rate and they want people in work and not protesting on the streets or being a drag on the government, right? People are working at a good thing, right? The government, obviously that becomes an issue on the receiving end, right? You're a country that's receiving a lot of attention from exporters, from other countries, right? So there's a lot of export coming into your country. Maybe companies in your country are doing worse after this, facing this international competition rate because people are becoming unemployed. Your tax revenue goes down because your local companies are doing worse. So it depends on which side of the fence you're on, right? It appeif the government is in charge of society, what scientists doing well and wants tax revenue, people able to spend. Okay, then this environment, right? This is an easy one, I think. Rory, what do you think is the effect of globalization on the environment? Can you just give me one effect? And this is an easy one. More globalization means more what in terms of the environment, pollution, ceterc. Very globzation shmeans pollution concentrated more in the age Yeah the more pollution, right? For sure. I agree. Like I mean, look, you coming to the uk to study, I went to the uk to study a few years ago as well. I mean, that is great thing for you for me. I mean, not sure how long you've been in uk, but I basically was there was a kid in that later on for University. I benefited. I mean, for sure, right? I mean, it was a positive thing. However, Yeah, very simply, I have to I have to look, Oh, I don't think it with people so much, but you do go abroad, you do go on a plane and export to come to uk for short contaminant, not just in terms of the production cost, production process, but also they have to get transported to the uk lapolluting staying, especially if it's sent by plane, also by ships polluting by truck from other parts of Europe, also pollute and then the production process for sure. Globalization also increases the output. There's more demand for everything globally. Think of China. I mean, pollution standards in China or pollution in China has not been one of the best things, right, as a consequence of globalization. I mean, pollution gets talked a lot about, but that gets talked about a lot, sorry, in China. And that's understandable. It's not just because maybe they could do a better job at looting less, but there's just so much demand for Chinese exports that these exports have to get produced. They have to come out of some right? And that causes pollution in itself or resource depletion. You're always polluting if you're doing some kind of economic activity, depends on the degree on the product, but we'll always be polluting something. So pollution and degradation, analytic waters, raw material kind of shortages, these are all consequences of globalization and economy growing across borders with okay. And then in terms of economic growth as a whole, we've talked about employment, tax revenue, also the sharing of ideas and technology, right? Really? I mean, I think this is a big thing, especially with through foreign direct investment. China did benefit a lot from fdi, right? Do you know what fdi is? Right? Foreign direct investment. You know what fdi is, right? Fdi, okay. The turn of benefit from fdi, especially a couple decades ago to go or ten, 15 years ago. Yeah, for sure. I mean, the sharing of ideas is always good of technology and that stays with the country. But I mean, foreign companies can invest in China, set up a factory and then shut it down and come back to wherever they're from. But the ideas and the skilled labor, our stays with the country, where it stays with China, stays with whatever country right, is a good thing. I mean, there's always the devvaluation point the other side of the story, does globalization cause instability in some countries, right? So if you're a big multinayou set up in some part of the world, you have a lot of influence in directly, right, in this new place. So maybe that caucauses some political stability, or maybe you're able to take advantage of the situation and just continue to remote to the idea of like taking advantage of workers, exploiting them etc., right? And not caring that pollution standard. So maybe that as well. I'm fine. So clear his law benefits to globalization, right? Maory, there's obviously some things to worry about, to take care of, to kind of think about, but it seems to be quite good, right? Especially for countries that Haan export led growth in of Japan, now more recently China, and even more recently less, say, Southeast Asia, right? That's probably taking some of the pie from China, okay, in terms of the potentially the more labor intensive industries, right? And then be someone else and therebe someone else, right? We will benefit Spain, where I live, where I'm from, Rory, we benefit from globalization as well tremendously. I mean, we don't manufacture so much, okay? What is what is spin's kind of big industry in terms of globalization? Rory? What do we depend on a lot in Spain? What is Spain known for? Spain is known for terms of like economic activity, like globally, like what do we depend on from the brewing? I don't know what's Spain known for. Have you been to spyou've? Been to spright? Maybe no no. Okay. People come from common holiday, right? From the uk come holiday tourism Yeah tourism for sure, right? So you spend might not depend on exporting physical goods, but tourism is an export. Mean people coming in. But the money, as in tourism, is kind of loable misunderstanding because it's kind of like, Oh, why is it an export? When you export, you're sending stuff away abroad. But jerrism is bringing people in, I get it. But it is an export. The money is coming in. There's money flowing in from other countries, just as if you celebrate in France, it flows back into your country, right? So trasm is a big export for Spain. 1010GDP is tourism derive, which is massive, right? And Spain is becoming a big, I mean, it's grown so much in tourism still, even if it's you know, it's a mature tourism destination with the most kind of long term destinations or oldest destinations in Europe. I mean, thing in parturkey and the Balkans, Montenegro, I mean, Crotia, these are very modern destinations. We're very recent, right? It's been on the map for British tourists norditoufor 50, 60, 70, well, pretty much since the sixties again, when it still hadn't inditained or so. It's still great that Spain is actually, especially Madrid and barcela, living a very good time, because a lot of South Americans obviously speak the same language as love connection, love historically, love tied between Mexico, Colombia, blah, blah, all these countries in bent Spain even more. Lots of people coming into study, to live, to work, right, to also escape some of these regimes, a unstable thing of Venezuela. It's quite an unstable run. So South America technically, well, technically should it should be more unstable politically. So sending the money to Spain, saving in Spanish banks. So Madrid's benefit iting love from this. I mean, it has really becoming like a little bit of a Little Miami. So it's even been on the inipress a lot kind of phenomenon. That's part of we can say this is probably does benefit Spain for sure, I think and it tends to be people actually like good immigration better than maybe some other immigration we've received before. And just a lot of interest from business, interestfrom, South America etc.. Spain Madrid is cities doing very well actually. So that's actually definitely also globalization rate. Yeah, okay. I mean London. Look, I mean London, the uk always benefited. Think of the uk export students, education and a brand. I mean this is classithing that's helped for a long time. It's a big source of employment, tax revenue etc., not just in terms of schools, universities and in general uk culture, right? Terms of films or had this kind of persona or understanding we all have as a British, right? And it's also sort of soft power, right? Like we all kind of, maybe some countries learn even to speak the British way. I mean, it is kind of a crazy thing, right? How people really like the British education system and see this kind of something called quite premium, right? Yeah, that's. A lot of soft power, lovely generations learning English, learning how to speak like an English person or coming here to them, going back. This is soft power. This is creating people that like the uk that have listened to, you know, look up to, right? Okay. Oh good. And the is also part of the you know pop culture tv programs. We will watch the same same tv programs we will have like Netflix, right? It doesn't matter where you live and we will end up watching the same things whether it's American or wherever, but it tends to be from certain countries and we will end up watching American stuff, right? No matter where from really in most countries. So exactly, Netflix yesterday thought they border up Warner Brothers. Did you hear about this room? No. It's a bit crazy if you guys still work in the best in banking, which is buying, selling companies or advising on the purchase and companies. And it's a little bit I've been working in that like for nearly two years now. But so interested to hear Netflix Yeah, actually, Warner brothink of Netflix, even a few years back was A A small company. And now they're not just in charge of what we will watch as terms of streaming on our tv. The Warner brofrom, my understanding is more of a film production company, right? Il does a bit of everything, right? So at the end of the day, American is Warner Brothers is an American company anyway. But these big American comlike ics are becoming even bigger and controlling not just another American business, but controlling everything that influences our daily lives. If you think of what do we spend our time on? Rory, look, let's many think of you. I'll suppose some things, okay, make some assumptions to you. Go to school in the uk. That's a British thick ring. You may watch them left licks, which is an American, say, Anglo Saxon English speaking thing. You watch films which are also American sash English. You're social media on Chinese social media as well. But a lot of is, I imagine, or myself, Instagram, Facebook, etc. So we all end up doing same things no matter where you're from. I guess you are in the uk, I'm in Spain, and maybe we all kind of do the same thing. Not not sure this is the same in other places, but we're all very marginous, right? That's soft power. That's Yeah very much globalization. I mean, is this a good thing then we all think it similar way that are we losing our cultures? Rory? Maybe, maybe brother, it's a good thing to globalize because everybody can have less culture, like culture shock, anything less conflict as people try to understand each other, more people getting choice, right? If you don't like it, you be something else, maybe more local. But I would pressure supeople in a certain way. Yeah, I think so. I mean, I'm sure there's some bad things about it, but we're all very similar. And that similarity sometimes as a bad thing, whereas as kids school, our teachers probably always like to think, tell us exactly real different is a good thing. We're all unique, right? Yeah but we're all not so unique to how across countries, right? And I think it's a good thing to give people a choice. And if they all end up making the same choice, we all want to watch Netflix. It's better than than the alternative. So be right. And I think culture still still remains, right? I think but but it maybe lesser. I mean, I think China is a good example of a country that still has a lot of culture, maintains strong traditional cultures. Maybe that's because it is relatively shut off a little bit silk past other countries, right? But eventually we will maybe become one. I don't know, that's a scary thing. Maybe not. Maybe we'll kind of keep our differences to some extent, but but Yeah, okay, cool. So the next bit is comparative advantage and absolute advantage. Okay, right. Yeah, okay. So do you know much about this? Have you done this at school? Absolutely. Comparative advantage. No, I don't think so. Okay. When we've heard of comparison artiat least, but I imagine a little bit right. Yeah, okay. What do you think is comparative about? I'm not necessarily asking for like a full definition, but more or less what do you think it is? Like compared to this, what's an advantage compared ative labi? Don't know if you've heard of this. Like it's more of a technical term in economics and macro. I don't know if you've had like some kind of sentence at school or something like we should all just concentrate on our comparative advantage. Have you heard of this? It's kind of so do with opportunity cost as well. Basically have a okay, go ahead. No, I have I haven't heard about this. Okay. So absolute advantage roaring is of is look, I'm pretty sure China has an absolute advantage in manufactured goods versus in all manufactured goods versus Spain. It produced pretty much anything cheaper. I'm pretty short. However, does that mean China has an a comparative advantage in all these products? No. Typicit's a very specific thing in one on one programs. But absolute advantages. You produce something cheap. You produce a phone cheaper than in Spain. You have an absolute advantage in the phone ones. And you can have many absolute advantages. However, comparative advantage is slightly differently. Comparative advantage exists when a country, okay, I'm reading off this specific definition again, is able to produce a good more cheaply relative to other goods produced. So it's basically compared to other products who produce your suffocate. So imagine we're in a too good economy. Two countries, two goods again. Yeah. So let's think we can produce cars and books again. Can you see my screen? Yeah you can right? Okay, this is this is the ppf of Spain kind. And I'll draw the Chinese one again for. China. Okay. What do these two lines represent? The current cross there in the middle. What do these two lines represent? One. Is like the production no no, not possito fronted, but one is like the production of China another way for Spain. Okay. Okay. So clearly look, what does this tell us? Could you could tell me some conclusions from this decvery simple observations already? I'm not asking necessarily for the gradients or some kind of discussion about that, but can you give me some simple one interpretation from this diagram like some kind of something that this diagram shows? Okay. I can't really think of the meaning of this tiger. Yeah, I think it is kind of confusing because they cross, right? But I think a big thing is just looking at the points, okay? The way they cross the axis. Yeah. So basically, if you think of Spain and China, two graphs or two lines, if Spain only produced books, it would produce more books than if China only produced books as well. If China only produced books theybe here, right? And you see this point, right? Spain only produced books that be here. So Spain clearly can produce way more books if both still only produce books, right? It seems to be that Spain is better producing books than China, right? Seems to, on simple terms, right? Spain only allocated cated all their resources and efforts to producing cars, theybe producing x number of cars. But China will be producing a lot more cars in Spain if they only dedicated all their efforts to cars again, does that make sense? Yeah. Okay. So we can say that basically, given that resources are the same, which is also an if China has an absolute advantage in cars and Spain has an absolute advantage in books, right? Yeah, okay, that's kind of absolute advantage, right? Comparative advantage is slightly different. Again, slightly, slightly different. China to make one more car has to give up some books, right? Imagine China's here. Can you see this point here as marwith an x? You see it, okay, to produce, let's say this is seven cars, okay? To come up here to eight cars, okay, it needs to give up some books to make more cars, right? Does that make sense? So how effectively has to give up a few books, right, to get some more cars? One more cardoes that. Can you see the transition from x? Let's call it this round point. Let's call this a from b. Well, b to distribute the only round book to get from b to a. China gives up a few books, a little bit of books to get one more car, right? Yeah. You see that it should be the little actually gto people for me to, Hey, okay, has to give up a tiny bit of books to get to get one more car. Obviously, the grain is quite steep. So this distance here, can you see this distance here is less than the one car in terms of distance, right? Do you see that? Yeah. So it's kind of like anything think about in the elasticities, right? It's it's about the change on one axis compared to the size of the difference in the other the other. Fine. So China is actually doesn't have to give up a lot of books to make one more car, right? Not really. It's quite steep the line here. Look, if if Spain, for example, we're here, okay? So producing a lot of books and some cars, let's say it's two cars, okay, to get three cokay. It has to give up a lot of books. Okay, do you see that? You that together from point c to point d okay just they up a lot of books to only get one more car, okay Yeah. Okay, so basically what is comparisons volunteers to Rory and I mean copy paste exact definition here. Comparative advantage exists when a country is able to produce a good more cheaply relative to other goods produced again. So it's when the opportunity cost of producing one more of something is quite low. So given Rory, let me ask you a question. Given both countries change, China and Spain wanted to produce one more car, just one more. Okay, who has the lowest opportunity cost in producing one more? China, I know, sorry, Spain, China. China. Because to go from seven to eight, it's a straight line to consume. It's always going to be the same at all points, right? To go from b to a, Yeah you have to give up a tiny bit of books. That's the opportunity cost of producing one more car, right? From from c to d to get just one more car, he has to give them an awful lot of books, right? This distance here, right is massive, right? Can you see this? Yeah, I've got a lot of books. Okay. So clearly the comparative advantage here is also the absolute object, but doesn't always have to be the case. I mean, this is simplified setting, right? But China has absolutely a more comparative advantage in cars. Spain has the absolucomparative advantage in books. The most important thing for the level course is comparative advantage came over. So thinking about in relative terms, look, America might have the absolute advantage in everything compared to the Zimbabwe, okay ory, they can produce everything cheaper than Zimbabwe, almost everything, I'm pretty sure, right? However, Yeah comparative advantage tells us that if we simplify this, and we just think about a too good economy, so China produces, sorry, America produccars and books, and Zimbabwe also produces books and cars, zimbaba will always have a comparative advantage, okay? So if we simplify down to two good or n or if we even if we didn't simplify, zimbaba will always have a comparative advantage even if they have no absolute advantage. But that makes Yeah so I don't see the theory of comparative laches tells us that it's not that America is better at everything or worse, everything. There's always a comparative advantage. And you should stick to your comparative advantage here. That's what the economic attion tells us. You always have a comparative advantage, which is obviously relative times, hence you should stick to it. And this is the most efficient for your economy to stick to comparative land, right? This causes some issues because countries might have a comparative advantage in the goods they may not like or a service. Again, Bangladesh clearly has a comparative advanced ititin textile manufacturing rate, apparently great. We will hardly make the factories of Bangladesh producing clothes, right? Made in Bangladesh. We see that a lot, right? Yeah. So they might not like this comparative advantage. They probably don't. I mean, it pollutes a lot. It's not great. They're rather have a compartive garinto a bit more more sexy in this way. There's that sense. Okay? Just more tech enabled, something that doesn't polluthis lot, not as labor our intense as potentially you, but they do. And they just have to stick to this comparative advantage. It doesn't mean that better textile manufacturing than the us. There are better relative times to what else they do. Okay? And this definitely should stick to it. Okay? And there's theories behind this. Okay? That's to why maximizes wealth out, why it's good for the economy. But let's just take to hopefully you can take literally just one point away from today's bit orthocracal artiitory is that every country has a comparative advantage here. No matter how bad you are and everything we can. It's always one thing you shy at compared to the other stuff that you do. Okay? And compartive advantage is very understood in Econ and is the most most efficient thing. You should stick to comparative advantage. Obviously, Rory, tariffs go against this, right? If we then add tariffs into this, you can distort comparative advantage rate. Look, if China has a comparative advantage producing this specific goods, but now Trump hits it with a tariff of 300%, China can no longer contribucentrate on its comparative advantage. Okay. As much so, this messes with their economic efficiency because they can't stick to that real comparative advantage anymore. Yeah. So those are some of the things I want to talk about today. I think that was interesting. Globalization pick, I mean, it's a bit of a soft topic. It's not what the first bit on just some ideas. It effects ects the reasons for globalization, effects the cons. They have a good idea now then comparto advantage and got advantage of the not like they're going to ask about product logiexplicitly, but something you can always incorporate into your essays. Again, there are some graphs for it like bit like this in a few more so maybe be worth revising for next time of Yeah. Okay. Do you have any questions to me? Rory? No, sorry, just I'm not feeling the best today so maybe not. Okay, no problem. No problem. Okay, so let's talk to you next week, right? And Yeah, talk to you next week. Hopefully you get better at it and maybe can continue with graation bit of stuff, some stuff on patterns of trade or terms of trade. So Yeah, okay, thanks. Have a good Sunday. Have a good Sunday. Bye. Take care.