OGIONIK wrote:...
I want to know why we have "depressions".
Economies go up and they also go down. A lot of this used to be tied to agriculture, e. g. a bad harvest could plunge a nation into a serious economic depression. That's a piece of what happened in 1929; it was not just the stock market crashing because of overaggressive speculation. It was also because the midwest, the breadbasket of the country, had depleted its topsoil and so became a dust bowl. Read
The Grapes of Wrath, which is fiction but a very good account of that time. You might also want to read Studs Terkel's
Hard Times which is nonfiction. He's an excellent writer and he lived during the Great Depression.
Economies also suffer if supplies are cut off, such as during the oil shocks of the 1970s or a war cuts off consumer goods (although during wars the weapons economy kicks in so, while consumer goods may be rationed, there is still some wealth; this is what happened in particular during the Second World War).
Corruption plays a part, too, although more in smaller economies or places where capitalism hasn't really dug in. It's not a depression in Somalia but it might as well be for the poor folks living there, stymied by a corrupt government withholding aid and selling it elsewhere. I'm not just picking on Somalia; that happens elsewhere in the world, too. The US isn't immune to such things but our economy is so much larger and more diverse that, if someone cut off the supply of butter, we'd just eat margarine or cream cheese. Not so in other, more fragile, economies.
OGIONIK wrote:...Why a company would sell a product in another country where it sells for less money....
A few reasons in no particular order:
- Lower advertising costs
- Lower office overhead or taxes
- Lower shipping costs
- The market in a wealthier country may be saturated
Sales aren't the only part of a company's wealth equation. It's also overhead. The costs of things like salaries, rent, lighting, the coffee in the coffee maker -- all of these things factor into profitability. If a company can cut its costs by renting instead of owning an office building, it will sell that building (and often rent space back from the firm it sold it to). If a company can pay lower salaries in North Carolina rather than Massachusetts, it'll move there, assuming it can find comparable talent (which it may or may not be able to do). Salaries can be slashed further in Mexico, China or India, but again the question is of local talent. Plus a company may want or need to have a local presence of some sort. Laws may even require that a company maintain an office in a particular state (I believe this was sometimes required by insurance commissioners).