Inflation and its impact on global commerce is a recurring theme in IELTS Writing Task 2. This topic combines elements of economics, international relations, and current affairs, making it a challenging yet relevant subject for test-takers. Based on past exam trends and the increasing significance of economic issues in today’s interconnected world, we can expect to see more questions related to inflation and international trade in future IELTS exams.
Let’s explore a sample question that exemplifies this topic:
Some people believe that inflation has a negative impact on international trade, while others argue that it can have positive effects. Discuss both views and give your own opinion.
Analyzing the Question
This question requires a balanced approach, discussing both positive and negative impacts of inflation on international trade. It’s crucial to:
- Understand the concept of inflation and its relation to international trade
- Identify and explain both negative and positive effects
- Provide examples or evidence to support each view
- Present your own opinion based on the arguments discussed
Sample Essay 1 (Band 8-9)
Inflation, the sustained increase in the general price level of goods and services, has long been a topic of debate regarding its effects on international trade. While some argue that it predominantly harms cross-border commerce, others contend that it can yield positive outcomes. This essay will examine both perspectives before offering a nuanced opinion on the matter.
Those who view inflation negatively in the context of international trade often point to its destabilizing effects on currency values and purchasing power. When a country experiences high inflation, its currency typically depreciates against other currencies, making imports more expensive. This can lead to a reduction in consumer demand for foreign goods and potentially disrupt global supply chains. Moreover, unpredictable inflation rates can create uncertainty for international investors and businesses, potentially deterring foreign direct investment and long-term trade agreements.
Conversely, proponents of inflation’s positive impact on trade argue that moderate inflation can enhance a country’s export competitiveness. A weaker domestic currency resulting from inflation can make a nation’s exports more attractive in the global market, potentially boosting their trade balance. Additionally, inflation can incentivize domestic production and consumption, reducing reliance on imports and fostering economic growth that could eventually strengthen a country’s position in international trade.
In my opinion, while inflation can have some short-term benefits for export-oriented economies, its overall impact on international trade is more likely to be negative in the long run. Sustainable and mutually beneficial trade relationships require stability and predictability, which high or volatile inflation rates undermine. Furthermore, in our increasingly interconnected global economy, the negative spillover effects of one country’s inflation can ripple through international markets, potentially causing widespread economic disruption.
In conclusion, although inflation can offer temporary advantages in terms of export competitiveness, its potential to create economic instability and uncertainty outweighs these benefits in the context of international trade. Policymakers should therefore strive for low and stable inflation rates to foster a more conducive environment for global commerce.
(Word count: 309)
Sample Essay 2 (Band 6-7)
Inflation is a big topic in economics, and people have different ideas about how it affects international trade. Some think it’s bad for trade between countries, while others see some good points. In this essay, I will talk about both sides and give my own thoughts.
On the negative side, inflation can make things harder for international trade. When a country has high inflation, its money becomes worth less compared to other countries’ money. This means that buying things from other countries gets more expensive, which can make people and businesses buy less from abroad. Also, when inflation is unpredictable, it can make international companies less sure about doing business with that country.
However, some people say inflation can help international trade in some ways. If a country’s money is worth less because of inflation, it can actually help them sell more things to other countries. This is because their products become cheaper for people in other countries to buy. Also, inflation might encourage people to buy things made in their own country instead of imported goods, which could be good for the local economy.
In my opinion, I think inflation is mostly bad for international trade, even though it might have some short-term benefits. It’s important for countries to have stable economies and prices if they want to trade well with other nations. When inflation is high or changes a lot, it can cause problems not just for one country but for many countries that trade with each other.
To sum up, while inflation might help some countries sell more to other countries in the short term, I believe it causes more problems than benefits for international trade overall. Countries should try to keep inflation low and steady to make international trade work better for everyone.
(Word count: 293)
Key Writing Tips
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Structure: Both essays follow a clear structure with an introduction, body paragraphs discussing different viewpoints, and a conclusion. The Band 8-9 essay demonstrates more sophisticated paragraph transitions and a more nuanced argument.
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Vocabulary: The Band 8-9 essay uses more advanced economic terms and phrases, such as “purchasing power,” “foreign direct investment,” and “export competitiveness.” The Band 6-7 essay uses simpler language but still conveys the main ideas effectively.
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Grammar: The higher band essay employs a wider range of complex sentence structures, while the Band 6-7 essay relies more on simpler constructions. Both essays maintain good grammatical accuracy.
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Coherence and Cohesion: The Band 8-9 essay demonstrates stronger coherence with more sophisticated linking words and a more logical flow of ideas. The Band 6-7 essay is also coherent but uses simpler linking phrases.
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Task Response: Both essays address all parts of the question, but the Band 8-9 essay provides more detailed analysis and a more nuanced conclusion.
Essential Vocabulary
- Inflation (noun) /ɪnˈfleɪʃən/ – a general increase in prices and fall in the purchasing value of money
- Currency depreciation (noun phrase) /ˈkʌrənsi dɪˌpriːʃiˈeɪʃən/ – a fall in the value of a currency in relation to other currencies
- Export competitiveness (noun phrase) /ˈekspɔːt kəmˈpetɪtɪvnəs/ – the ability of a country’s goods to compete in international markets
- Foreign direct investment (noun phrase) /ˈfɒrɪn daɪˈrekt ɪnˈvestmənt/ – investment from one country into another, typically by companies rather than governments
- Economic stability (noun phrase) /ˌiːkəˈnɒmɪk stəˈbɪləti/ – a state of an economy with minimal fluctuations in output and employment
- Trade balance (noun phrase) /treɪd ˈbæləns/ – the difference between a country’s imports and exports
- Purchasing power (noun phrase) /ˈpɜːtʃəsɪŋ ˈpaʊə/ – the ability of a currency to buy goods and services
- Global supply chains (noun phrase) /ˈɡləʊbəl səˈplaɪ tʃeɪnz/ – the worldwide system of producing and distributing goods and services
In conclusion, the effects of inflation on international trade is a complex topic that requires a nuanced understanding of economic principles. Practice writing essays on similar topics, such as the impact of trade tariffs on global economies or the effects of currency fluctuations on international business. You can also explore related subjects like the economic consequences of trade tariffs or the effects of political instability on global markets. To improve your skills, try writing your own essay on this topic and share it in the comments section for feedback and discussion.