http://www.bloomberg.com/apps/news?pid=20601087&sid=apHrv2heUXOs&pos=3

The main thing talked about here is our old friend China, and their attempts to play the system. Yes we are talking about currency manipulation. Although the Obama administration is being pressured to slap a "currency manipulating" tag on China the administration has not done so. Economists have seen the writing on the wall, but Government is not quite convinced yet. China is claiming that they are not manipulating currency, but only trying to get through what Chem Deming calls a "blip".

Here is the thing China is what it is, but it is effecting everyone else by manipulating currency. Lets be real about this, that is what they are doing. I understand doing this to a point, but the nations involved with the NIEO will have to draw the line in the sand where they feel it should be. Here is my issue: China has an advantage by doing this, but they are doing it in what would seem to be within its rights. So yes is sucks for the rest of us, but at some point the other countries involved with the NIEO are going to say enough is enough. China can not keep saying "just one more month, just one more month".

http://www.nytimes.com/2010/04/14/business/economy/14econ.html?sq=export%20us&st=Search&scp=1&pagewanted=print
Article „Imports rose in February, Building hope for recovery“ from the New York Times from April 13, 2010.

According to the article „Imports rose in February, Building hope for recovery“ from the New York times, Hernandez stated that there was a 1.7 percent increase in imports in January in the U.S and that this a drag on economic expansion in the short term, while it is reflecting a healthy pickup in spending. In February there was an increase in exports from 0.2 percent and the analysts expect growth in exports to continue as global demand pick ups. Furthermore, economists say exports may begin to outpace imports and contribute positively to the G.D.P.

I picked this article because it is contrary to the standard model. The standard model says that an import-biased growth increases a country’s terms of trade, generally increasing its welfare and decreasing the welfare of foreign countries and that export-biased growth reduces the country’s terms of trade, generally reducing its welfare and increasing the welfare of foreign countries. However, this article shows that currently the U.S is import-biased and that this is not good for the G.D.P-there is a trade-deficit- and therefore it is reducing the country’s welfare. However, they noticed that the country’s welfare is going to rise when the exports are going to increase. Thus, the article shows that export-biased growth is increasing the country’s welfare and import-biased growth is reducing the country’s welfare.

Ups, sorry, this is the Assignment for class on April 13, 2010. Assignment for class April 15, 2010 will follow.

http://www.nytimes.com/aponline/2010/04/16/business/AP-WA-Liquor-Sales.html?src=busln&scp=1&sq=monopoly&st=cse
Wash. Initiative Would End State Liquor Monopoly
By THE ASSOCIATED PRESS
Published: April 16, 2010
The article talks that there has been an initiative for "cancel" the actions of the government selling liquor monopolistically. Citizens are complaining about the tricky decision made by the campaign of the government. They think the government should vote for the good, not the compensations for deficits they want.
The new international economics concept involved is that once monopolist can gain the power of higher the price, they take advantage of people. The government in Washinton.D.C, as stated in the article, does that.
My assessment is that monopoly, from some perspecitve, benefits people in the sense of better providers of goods for people. However, the monopolistic power for merchadises should not be gained by the government. Government is a social sector to benefit people, not a selfish organization obviously taking advantages of citizens. By the way, I think the monopoly theory in new international economics is pretty reasonable to explain the behavior of monopolists.

Website: http://www.csmonitor.com/From-the-news-wires/2010/0416/What-the-heck-is-a-WePad
Title: What the heck is a WePad?
Date: April 16, 2010

Before I start, I couldn't really find an article that fit perfectly with the lesson in Ch.6 but I'll try my best to tie this article to the lesson of that chapter.

Article Summary:
The article pretty much introduces a new German tablet PC called the "WePad" that is to be released soon and is said to rival the Apple I-PAD. It first talks about the spec and price of the German PC tablet. The article claims it is equipped with USB ports has wifi and is said to have a larger screen than the I-Pad. After, it explains how it's Linux system will provide very friendly user system. Finally, they explain how the WePad they believe will appeal to the general consumer.

In chapter 6 it stated how "intraindustry trade" allows consumers greater choice. For example, people can choose to buy from Ford, Honda, Toyota, and plenty of others. Well this is similar to that. This article is stating that Germany is in fact entering the PC tablet industry. This in effect will give consumers more of a varied choice in the PC tablet products.
Another thing that this article imparts in a subtle way is that new companies like Apple and Neophonie (WePad developer) are in fact trying to enter a new industry which is the PC tablet business which will mean monopoly. I say monopoly because hardly any companies are in the mainstream of selling these types of tablets yet aside from Apple and Neophonie. This will mean if tablets do make it big with consumers, other companies like say Sony may enter the industry until tablet prices equal equilibrium price. Meaning prices later of tablets when competitors enter the industry will likely drop similar to let say the iphone.

http://www.bloomberg.com/apps/news?pid=20601012&sid=aD7WPTYQzxU0
Title: Cocoa Advances in London, N.Y. as Demand Exceeds Expectations
Date: April 16, 2010
This article talks about the condition of the increasing demand of the chocolate ingredient of North America and the rising output of cocoa-bean in London, N.Y.. As the author states in the article, the increasing demand and gains meant the “broader economy recovery” and will provide incentives to trade market.
The new international economics brings in the economies of scale and abandoned the assumption of constant returns to scale, and pointed out that the economies of scale will lead to a imperfect competitive market structure and at last lead to a monopolistic competition. This article does not directly relate to the New International Economics, however I think it might include some concepts. We can assume that the rising output of cocoa-bean in London is a result of expansion, in other word, they have an increasing of economies of scale. As the North America also has an increasing demand, so mutually trade benefit both

http://www.csmonitor.com/Money/Donald-Marron/2010/0412/Spirit-Airlines-to-charge-to-carry-on-luggage
Title: Spirit Airlines to charge to carry-on luggage
By: Donald Marron
Date: 4/12/2010

This article starts off by talking about luggage space for airlines travel being extremely limited and hard to come by. To combat this "tragedy of the commons" as the article puts it, Spirit Airlines has decided to start charging for carry-ons. This comes as a strategy to further reduce air fairs and attract more customers. The idea behind this is that you have customers actually pay for the services that they want, instead of "subsidizing the choices of others".

There is one specific aspect of this article that is highly relevant to the discussion of new international economics. The fact the the airlines are trying to lower costs as much as possible shows that they are extremely desperate to get more people on the flights. This is due to the fact that fixed costs in the airline industries as extremely high whereas the added cost per person on a flight is negligible (consisting of mostly food costs). Thus with the nature of our current economic status it is very important to get costs lowered to attract airline customers, and get flights as full as possible. Doing so will make the average cost per person go down an extreme amount and perhaps save the airline industry from economic collapse.

http://www.nytimes.com/2010/04/17/business/17bank.html?ref=business

1.
The New York Times
Bank of America, With Merrill’s Help, Returns to Profit
April 16, 2010

2.
The article was primarily about Bank of America's return to profitability. This was mostly due to their acquisition of Merrill Lynch. “The surging profits from trading at Merrill Lynch helped to cover continued losses from consumer loans, propelling the bank to a first-quarter profit after two consecutive quarters of losses.”

3.
New international economics might look at this in terms of economies of scale. It would seem that before the financial crisis the banking industry depended on external economies of scale. Now it appears that banking is now a internal economies of scales industry.

4.
I'm not sure, but the banking industry might be getting a little oligopolistic. Also, the article mentions the possibility of future regulation. This could potentially cause a reverse in the trend of economies of scale from internal back to external.

http://www.businessweek.com/news/2010-04-17/venezuela-secures-20-billion-loan-from-china-chavez-says.html
Venezuela Secures $20 Billion Loan From China, Chavez Says
April 17, 2010, 11:29 PM EDT

This article is about Venezuela securing $20billion loan from China. This is not the first time Venezuela has borrowed money from china. Venezuela is using a good deal of that money for financing infrastructure projects. The article states that Venezuela is paying back a previous loan from China by providing 460,000 barrels of crude oil a day.

My assessment is that this article is a great example of the attainment of official development assistance by a developing country. Venezuela is using its recourses to pay back China for loans used in state development. Venezuela according to the article also working on diversifying its export markets and seeking loans from other countries, in a bid to boost oil output and finance social programs.

http://www.bloomberg.com/apps/news?pid=20601204&sid=aYJIHoEwNV0M
"Oracle Agrees to Buy Phase Forward for $685 Million"
Published: April 16, 2010

The post on bloomberg.com that I analyzed discussed Oracle Corp. and their plans to acquire Phase Forward Inc. The article talks about how "Oracle Chief Executive Officer Larry Ellison, 65, has spent about $42 Billion buying 62 companies since January 2005". This most recent merger with Phase Forward, a company whose software aids the healthcare industry "share data for clinical trials", will add to Oracle's portfolio of industry-specific companies that have been taken over by the software giant.

The concept that most closely relates to the ideas found in the New International Economics is the concept of internal economies of scale. As the book states, "Internal economies of scale result when large firms have a cost advantage over small firms, causing the industry to become uncompetitive". Although there is not yet any hard proof that Oracle is causing imperfect competition in the software industry, it certainly seems that the software conglomerate is headed in that direction. Since Oracle is, as the article states, "the world's second-largest software maker", they obviously have a cost advantage over less substantial software providers such as Phase Forward. This means that Oracle can buy out their smaller competitors, slowly work their way towards oligopoly, and then eventually cause monopolistic competition in the software industry. The standard model holds true in this situation because Oracle, by boasting a sort of "export bias" in the software industry, they reduce welfare of the consumer.

http://www.bloomberg.com/apps/news?pid=20601068&sid=a0whQXy1caHs
Title: Home Sales, Goods OrdersProbably Climbed: U.S. Economy Preview.
Date: April 18, 2010
The article is explaining how more people are starting to buy durable goods and spend more money in the economy. Economist are explaining this recent spike in purchases due to the credit that the Obama administration extended for first time home owners and some already home owners that is ending this month. Overall this trend is showing that the manufacturing industry might end up being the leaders of the economic rebound and trading is increasing.
The concept for new international economics is intraindusty trade because the concept deals mainly with large amounts of manufactured goods such as durable home goods. There is also no clear comparative advantage within the industry.
For the Standard Model this article uses that model because of how the production possibilty frontier has changed with the changing of demand for more durable goods and homes. Also the article stated that economy was growing due to more Americans now spending more money then they have been in the last couple of years. This could be an economic growth which would change the curve. Americans are also importing goods more so there is a biased growth with some of the goods being bought.

Bloomberg: http://www.businessweek.com/magazine/content/10_17/b4175034779697.htm
Title: The 50 Most Innovative Companies
Date: April 15, 2010

The article stated that in the past decade, the U.S. was losing an estimated 2.4 million factory jobs to China. In the 2010 Bloomberg BusinessWeek annual rankings of “Most Innovative Companies”, 15 of the Top 50 are Asian—up from just five in 2006. An alarming trend to Westerners. The factories of South Korea, Taiwan, and China were producing sneakers, toys, and T-shirts to personal computers, consumer electronics gear, household appliances, and even cars. The West is still regarding Asia's high-tech products as inferior knockoffs of items designed in the U.S. because of knowledge economies and low cost manufacturing.

The reason that China rise as biggest is because of their opportunity of economies of scale. China has large firms and low input costs (eg. labor costs, location costs) and can therefore a bigger amount of output and therefore produces to lower costs. Furthermore, China is specializing, not in innovation as most of the largest U.S firms, rather in copying the products of the Westerns. That is why they don’t have large development cost and can produce big amounts of the products to achieve economies of scale (also the fixed costs are lower and so it is easier to achieve economies of scale) and low prices that allow China to compete successfully with the western and gain from trade.

http://www.nytimes.com/2010/04/18/us/18border.html?hp
By JAMES C. McKINLEY Jr.
Published: April 17, 2010
Fleeing Drug Violence, Mexicans Pour Into U.S.

This article talks about the violence that is happening in Mexico because of the drug trade. Many families are affected by this many house are burn to the ground and innocent people are being shot too. Many citizens from Mexico refuse to live in this situation and are crossing the border in order to escape danger. The families crossing the border are being turned away and that is not good becuae the danger that they face in Mexico is very great. The United States is a place that these families can have assluym. This has to do withthe New International Economics becasue the more immigrants that come into the country can cause trouble to the already crowded area. The new children that attend the school has the school increase police presence for the danger that looms in these areas. Other factors that relate to the New International Economics is the danger of violence and how it is bad for businesses in Mexico because a lot are getting burned down and damaged. The drug trade is a negative externality. The cause of all this violence is the illegal drug trade. The amounts of immigrants migrating has an effect on the market the more people that are coming causes more resources to be used by the United States and Texas government. Many people are turned away because it will cost money for the United States to support the people who migrate and there family. In today when the United States is going through a recession the issue with the drug trade will be a trying time.

Source:http://www.nytimes.com/2010/04/17/business/17bank.html?ref=business
Title: Bank of America, With Merrill's Help, Returns to Profit
By ANDREW MARTIN
Published: April 16, 2010

The article reported that Bank of America reported first-quarter profit of 3.2 billion or 28 cents per share. It went on to say that the performance was a bit of a surprise beating expectations by 3 times. Most of this was due to higher than expected earnings from Merrill Lynch, which Bank of America controversially acquired during the financial crisis. 


New international economics might point to the performance of Merill Lynch, now part of Bank of America, as experiencing internal economies of scale. Though the company is not fully integrated into Bank of America it may benefit from the size and scale of the bank to take advantage of certain cost savings it could not have before. 

I think this may be a bit of a stretch, since merill lynch is not fully integrated into Bank of America most of the cost savings of being in a larger organizations are not taken advantage of. Further more, economies of scale are only one explanation for the performance, it could have just been a good quarter.

http://www.nytimes.com/2010/04/12/science/space/12rocket.html?pagewanted=1&sq=economies%20of%20scale&st=cse&scp=5

New York Times,2010-04-11

In the article “Aerospace Business Has Its Doubts About Plans to Revamp NASA”, the author Kenneth Chang wrote about the idea of providing taxi transportation to the International Space Station.and how different firms respond to that. According to the article , Lockheed Martin announced that it expected there is no market for them while Boeing has a great interest in developing space taxis. The plans of building space taxis will by financially supported by the NASA.
As both companies lost lots of money while developing rockets, they set up in joint venture called the United Launch Alliance in 2006.
I have chosen this article because it seems pretty clear that the joint venture was set up the reach some economies of scale. By developing and producing together, the companies will reach especially economies of scale, eg by cheaper research and development Costs and by lower acquisition costs. Furthermore, this example shows pretty clear, that external economies of scale usually give large firms a cost advantage. As there are no other big competitors, Boeing and Lockheed Martin have a huge cost advantage over small fims. This leads to an imperfectly competitive market and this means the whole industry is uncompetitive.

Posted Above but the formatting got messed up after copying from Word, so I am trying this again:

Source:http://www.nytimes.com/2010/04/17/business/17bank.html?ref=business

Title: Bank of America, With Merrill's Help, Returns to Profit
By ANDREW MARTIN

Published: April 16, 2010

The article reported that Bank of America reported first-quarter profit of 3.2 billion or 28 cents per share. It went on to say that the performance was a bit of a surprise beating expectations by 3 times. Most of this was due to higher than expected earnings from Merrill Lynch, which Bank of America controversially acquired during the financial crisis.




New international economics might point to the performance of Merill Lynch, now part of Bank of America, as experiencing internal economies of scale. Though the company is not fully integrated into Bank of America it may benefit from the size and scale of the bank to take advantage of certain cost savings it could not have before. 

I think this may be a bit of a stretch, since merill lynch is not fully integrated into Bank of America most of the cost savings of being in a larger organizations are not taken advantage of. Further more, economies of scale are only one explanation for the performance, it could have just been a good quarter.

http://www.csmonitor.com/Money/Robert-Reich-s-Blog/2010/0416/Future-of-American-jobs-won-t-look-like-past
"The Future of Americans Jobs wont look like the past"
By: Robert Reich
Published: April 16, 2010

This article is about how the job market in American will not be the same even after the recent depression has passed because of foreign outsourcing and jobs that can be done only by computers now. It is also said that many Americans who have lost their jobs are now being forced to take lower paying jobs or they are over qualified for. He says that unemployment rates will be going down but only because Americans are now accepting lower pay, part-time, or under-qualified jobs. The New International Economics states that it is to improve trade terms, develop assistance and other =means so in this article it directly relates to developing a new way to improve the unemployment issue in the US. the standard model states that

Source: http://www.nytimes.com/2010/04/18/opinion/18friedman.html?hp
Title: "Just Doing It" by Thomas L. Friedman
Date: April 18, 2010

This article, by renowned author Thomas Friedman, provides a quick synopsis of a new start-up company called EndoStim. This start-up company in medical technology is testing a pacemaker-like device to help treat acid reflux disease. What is truly unique is that the company principals include a Cuban doctor, a US venture capitalist, an Indian-American doctor, a South African investor, and two Israelis (a medical engineer and a gastroenterologist)... and the prototypes are being made in Uruguay with clinical trials to be held in India and Chile. The product will be "invented and financed in the West, further developed and tested in the East and rolled out in both markets."

In this article, Thomas Friedman uses this new start-up to illustrate the concepts in his book, "The World is Flat," where alliances and companies are formed without corporate or political or geographical barriers, and communication is easily achieved cross continents. This new start-up relies on intra-industry trade of financial and intellectual capital to form a new entity, which will start out as a monopoly (as a company manufacturing a totally new product) until competitive products are developed. What will be interesting is to see which country has enough comparative advantage to be the manufacturing hub for the product, and benefit from the new jobs created. Friedman states that the corporate headquarters for EndoStim may end up in St. Louis. This new company might in fact be acting like a mini-industry or global market; each different participant in the organization has a comparative advantage in one or more facet of the business, and they will be competing with each other to obtain advantages for their countries and economies, all for the benefit and economies of scale (and subsequent profit) for the company at large.

http://www.csmonitor.com/From-the-news-wires/2010/0416/What-the-heck-is-a-WePad

1) www.csmonitor.com
What the heck is a WePad?
April 16th, 2010

The article was primary about the German Company launching WePad, which is similar to the Apple's Ipad launched 1 month ago. The article talks about how their WePad has better features as compared to the Ipad and it will be more user friendly then Ipad. This article also mentions that how Neofonie, a German Tech company, is trying to get rid of the Apple's monopoly by stating one unique platform for the users to use like Apple's itunes or Amazon's Kindle.

The article really took into account the monopoly of Apple's touch screen market and saw that chaning into oligopoly with Neofonie entering into the market. Article did mention about how Apple being into intra-industry trade will help as it will reduce the per unit cost but at the same time Neofonie being into intra-firm trade will not have the same advantage of low per unit cost as it will have to build its market across countries. But if somehow, Wepad is able to tap the market more then Ipad then it would lead to more economic growth and welfare of trade with the international transfers of income running towards Neofonie side.

http://www.nytimes.com/aponline/2010/04/16/business/AP-WA-Liquor-Sales.html?_r=1&src=busln&scp=1&sq=monopoly&st=cse
Wash. Initiative Would End State Liquor Monopoly
By THE ASSOCIATED PRESS
Published: April 16, 2010

The article states that there is a campaign to break the state government liquor monopoly. The initiative would get the state out of the liquor sales and distribution business, allowing private companies to take over those functions.” One version also would chuck the ''three-tier'' system of liquor regulation, which puts strong controls on the wholesaling, price markup and warehousing of alcohol.” There is a strong opposition.
The concept involving the concept of the New International Economics is monopoly. In a monopolistic market, in this case liquor , companies take advantage of their consumer rising prices whenever they like.

My assessment on monopoly is that if the government thinks that taking control over liquor sales will help the people than they should take control. Realistically, governments should have a balance and reduce monopolistic firms whether is liquor, coffee, or underwear. The international or domestic market should be that each firm sells what is best selling.

http://www.bloomberg.com/apps/news?pid=20601039&sid=a6IMNyJEUnhw

Title: HTC Is Most Virtuous in Microsoft Brothel
By: Rich Jaroslovsky
Date:April 15, 21010

This article talks about the new phone called HTC which has amazing smartphone features is still not beating the demand for iphone because it is powered by Microsoft Corp. The evidence can been seen by the fact that Microsoft's s subscribers fell 15.7 percent during last quarter according to the statistics in the article. HD2 hardware and the T-mobile network, which is not even nearly as good as Verizon and AT &T, is also causing the downfall of this new smartphone.

The reason why i choose this article is because it take the notion of competition within the intra-industry and monopoly into consideration which holds considerable importance in NIEO .On one side, where this competition is encouraging these massive companies to innovate, at the same time, infant industries may be discourage because there chances of success are very few. In this example, Apple's launch of iphone is acting like a monopoly in the cell phone industry. Despite the features of the other smartphones, somehow the demand for Apple products is munch more than the other brands. For example, Apple's most recent launch of ipad has a lot of international demand as well.In conclusion, because of increasing demand of Apple products, HTC smartphone is having difficult time.

http://www.nytimes.com/2010/04/10/business/global/10china.html?scp=1&sq=trade+deficit+&st=nyt
China Sees First Trade Deficit in Years
By KEITH BRADSHER

China announces that it just had it's first trade deficit within the last six years. Imports increased while exports remain the same due to the increase in demand in China. Another problem that happened was during March when Chinese New Year happened. Factory workers along the coast returned home for New Years and a large number of them didn't return because of all the jobs opporunity in their home cities. This delay the factories from producing materials for export due to lack of labor power. The Chinese government also spent billions on dollar on controlling their currency by not allowing it to appreciate. By doing this it helps keep their rate lower than the world's rate which helps give them an edge on the export market share.

The New International economics is the concept that larger firms may have an advantage over smaller firms on production cost. Since larger firms produce more units, the overall cost per units will decrease. This creates an imperfect competition between the two. In the standard model it claims that importing will help the country's welfare whille exporting will decrease it. This doesn't apply to what is happening today in China due to the trade deficit which reduced the Chinese GDP.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ad4mqUsfvJ4Y&pos=6
UAL-Continental Merger Would Lead on Higher-Fare Routes Abroad
By Mary Jane Credeur and Mary Schlangenstein
Published on April 17, 2010

This article discusses the merger between United Airlines and Continental Airlines, and passengers will continue to pay some of the highest prices in the industry. The airline industry is oligopolistic, therefore, due to the fact that UAL and Continental don't feel that they are pressured by competitors to lower prices, they can maintain high prices that consumers will pay. This oligopolistic environment lies in between perfect competition and a monopolistic environment. Also, by combining resources, pooling the labor market, and fostering knowledge spillovers, this merger can create economies of scale, helping UAL and Continental to achieve economies of scale.

http://www.nytimes.com/aponline/2010/04/18/business/AP-World-Markets.html?_r=1&ref=business
Asian Stock Markets Tumble in Early Trading
By THE ASSOCIATED PRESS
Published: April 18, 2010

After the reveal of fraud charges against Goldman Sachs the Asian markets trumbled on Friday April 16,2010. Toyota and Honda motor stocks trumbled. Another major effect was seen at the Japaneese markets where Japaneese banking shares among severe casualty. Sumitomo Mitsui Financial Group Inc. plunged 4.4 percent and Mitsubishi UFJ Financial Group Inc.was down 3.3 percent.

http://www.bloomberg.com/apps/news?pid=20601068&sid=az.3AvgKokm4
India may increase rates for the second time in month
by:Cherian Thomas

Inflation rates have driven up the prices in india causing redundant finacial difficulties and blocks. Indias central bank is going to announce tomorrow the raise in interest rates from 3.5 to 3.75 and from 5 to 5.25. seeing how the interest is already devastating, this kind of increase is outrageous.India currently has the highest inflation around Asia. Chia has already caused problems to india by undervalueing their currency resulting in indias inability to act

http://www.bloomberg.com/apps/news?pid=20601087&sid=apHrv2heUXOs&pos=3
China's current trade deficit may be temporary but the effects on the yuan's inflation are posing a long term threat by means of a considerably overheated economy. China's deficit is expected to return to surplus next month as their surplus has risen 24% from a year earlier and 46% since February. The deficit will be only a "blip" according to Chen Deming. Robert Hormats, U.S. undersecretary of state for economic, energy and agricultural affairs, said in an interview at the Boao Forum. “We really have to look at longer-term trends.” The temporary trade deficit only distracts from the fact that a modest revaluation of the yuan is likely "still on the agenda."

http://www.nytimes.com/2010/04/20/business/20markets.html?ref=business
New York Times, "Drop in Commodity Prices pushes major indexes down," Javier G. Hernandez

The main focus in the is the fact that major banking companies such as wells Fargo, CitiGroup, and Goldman Sachs have been slowly increasing their stock values. The implications this has had on other industries is quite substantial. For telecommunications coprporations such as AT&T and healthcare corporations such as UnitedHealth Group, profits were predicted to increase steadily due to the stability, slowly resurfacing to the United States financial institutions. On the other commodities prices have decreased hurting industries such as gold, oil, steel, which the latter of the two have been affecting the European airline industry severly.

With these types of situtations, there is never a clear answer. As stated in Chapter 6 there are two types of economies of scale; external and internal. The banking industry is definitely dealing with internal economies of scale because although they are all interraelated, a company such as Stanley Morgan compared to Bank of America. has a greater advantag due to their investment growth opportunities. On the other hand an airline company will face external economies of scale due to the fact that the industry is so globally operated, that it would take constant agreements to keep competition alive.