Week One Blog: How open to openness you are?

Openness to trade refers to nations permitting trade with other nations or economies. Openness consists of exports and imports of goods and services as a percentage of Gross Domestic Product. This is a measure of the value a nation places upon trade. Open economies tend to have greater market opportunities and greater competition from other countries. In the twenty first century, with the increase in globalization, it is necessary for countries to be more open to trade, have open economy with less trade restrictions, which would increase competition among the businesses based in different countries. With the increase in competition, the prices of commodities will be lower in the consumer market. It is important for a country to be open because of economic interdependence and stimulate economies which will be mutually beneficial as it will provide comparative advantages, increase efficiency, develop innovation, technology and supply chain relations. The traditional barriers, domestic regulations should be adjusted or lifted to enhance market openness through regulatory reform in international trade. As an example, small country like Greece has implemented “Macroeconomic Reform" to improve the country's economical performance.

Figure: Advantages of Openness in different branches.

A country with trade restrictions cannot prosper and hence end up having inflation and poor economic conditions. Therefore, it is very essential for countries to be open, allowing other countries to make FDI and expand the market with increase in completion, providing better choices of goods at lower prices to the consumer. Having opportunity for FDI and trading products with other countries would be a great benefit.

I strongly believe openness would help the entire global economy. More products would be bought and sold and more jobs will be available for the people living in the countries. Nations become more open, relationships between countries get stable, residents are able to work for their country, consumers get great deals on products, and as a result the country's GDP increases.

•  FDI: Foreign Direct Investment
•  GDP: Gross Domestic Product
•  Macro-economics: Macro-economics is a branch of economics dealing with the performance, structure, behavior, and decision-making of the whole economy.