WHAT IS THE IMPLICATION OF INTEGRATION OF MARKETS?
Answers
Answer:
Four- to Ten-Fold Increase in Device, Hand Tool, and Test-Equipment Prices
In EEM countries, the labor cost was, and still is, many times lower than in WM. In addition, standardization, limited product selection, dictated prices, and retarded technology further reduced the cost of EEM devices. The transition to Western technology and WM caused a four- to ten-fold increase of device prices for health care facilities in the transitioning countries. Hand tools and test devices purchased on the WM present a similar price challenge. Therefore, considering local purchasing power, the relative cost is four-to eight-fold as high as for a buyer in the West.
Answer:
Both producers and consumers gained, but welfare gains were inversely related to the size of the country and positively to the level of openness to trade. We infer that welfare gains from international market integration were equivalent to substantial shares of economic growth in the 'long 19th century'.