INTERNATIONAL TRADE THEORIES

The basic theories of international trade are:

THE MERCANTILIST supports the importance of exports and lowering imports,also receive-currency payment is based on gold standard and hence the problem with this theory is that it excludes the import good.
ABSOLUTE ADVANTAGE Based on what they produce has more advantages in its production and marketing whose theory is attributed to Adam Smith.
COMPARATIVE ADVANTAGE Based on commercial gain through specialization in the production of the good that has an absolute advantage,which was put forward by David Ricardo.

FACTOR ENDOWMENTS :This theory states that it should export products that are used intensively and having numerous factors that must import the products in use are scarce. The theory was espoused by Heckscher and Ohlin.

Also exposed the product life cycle where explain four stages that are the introduction,growth,maturity and the decline; At present show that The big challenges of the International Product Life Cycle these days are  dealing with a very short Introduction Stage, due to technological competitiveness and
extending the length of the PLC through Market Modification and Product Modification.

 

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INFLATION AND ITS IMPACT

Inflation is an increase in prices of goods and services in a period of time which is regulated by consumer price index and this measure price increses and decreases on common group of consumer goods and services on a monthly basis. The consumer price index is very similar, but not to be confused with, to the cost of living index which allows for substitutions of the items as prices move higher or lower.

The consumer price index used to observe the impact of inflation on the market and thus able to find the causes of inflation are many, within them are: Demand-pull inflation, the cost-push theory, money supply and also  the inflation can artificially be created through a circular increase in wage earners demands and then the subsequent increase in producer costs which will drive up the prices of their goods and services.

About my country inflation rates tend to ascend every month by various problems such as climate, terrain, the terms of trade and social issues, political and economic present in our government. The inflation rate in Colombia was last reported at 3.17 percent in February of 2011 and so far has had a change of -26.19 percentage of what today generates an inflation rate of 3.10% that we see in the following chart and accompanying table:

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Year	Inflation rate (consumer prices)	Rank	Percent Change	Date of Information
2003	6.20 %	53		2002
2004	7.10 %	56	14.52 %	2003 est.
2005	5.90 %	159	-16.90 %	2004 est.
2006	5.00 %	139	-15.25 %	2005 est.
2007	4.30 %	120	-14.00 %	2006 est.
2008	5.50 %	134	27.91 %	2007 est.
2009	7.00 %	116	27.27 %	2008 est.
2010	4.20 %	133	-40.00 %	2009 est.
2011	3.10 %	88	-26.19 %	2010 est