International economics

Cover......Page 1
Contents......Page 11
Preface......Page 17
About The Authors......Page 21
Chapter 1 An Introduction to International Trade......Page 23
 Characteristics of National Economies......Page 24
 Economic Growth......Page 28
 International Trade......Page 29
 The Direction of International Trade......Page 32
 What Goods Do Countries Trade?......Page 37
 Exercises......Page 44
Chapter 2 Tools of Analysis for International TradeModels......Page 45
 Some Methodological Preliminaries......Page 46
 The Basic Model: Asumptions......Page 48
 Global Insights 2.1: World Response to Higher Relative Price of Oil......Page 50
 The Basic Model: Solutions......Page 56
 Measuring National Welfare......Page 58
 National Supply and Demand......Page 60
 Exercises......Page 62
 Appendix 2.1:Derivation of National Supply and Demand Curves......Page 63
Chapter 3 The Classical Model of International Trade......Page 65
 Absolute Advantage as A Basis For Trade: Adam Smith’s Model......Page 66
 Comparative Advantage As A Basis For Trade: David Ricardo’s Model......Page 71
 The General Equilibrium Solution of The Classical Model......Page 72
 The Gains From International Trade......Page 76
 Trade and Wages......Page 78
 Global Insights 3.2: Wage and Productivity Comparisons for the United States and Mexico......Page 80
 Summary......Page 82
 Exercises......Page 83
 The Classical Model With Many Goods*......Page 84
 Offer Curves and The Terms of Trade......Page 86
Chapter 4 The Heckscher–Ohlin Model......Page 89
 The HO Model: Basic Assumptions......Page 90
 Global Insights 4.1: Capital/Labor Ratios of Selected U.S. Industries......Page 92
 The HO Theorem......Page 94
 Equilibrium In The HO Model......Page 96
 Some New HO Theorems......Page 101
 Summary......Page 105
 Exercises......Page 106
 The Heckscher–Ohlin Theorem (Price Definition)......Page 107
 The Rybczynski Theorem......Page 109
 The Stolper–Samuelson Theorem......Page 110
 Appendix 4.2:The Specific Factors Model......Page 112
Chapter 5 Tests of Trade Models: the Leontief Paradoxand Its Aftermath......Page 114
 Tests of the Classical Model......Page 115
 Tests of the HO Model......Page 117
 Attempted Reconciliations of Leontief’s Findings......Page 118
 Other Tests of the HO Model......Page 121
 Recent Tests of the HO Model......Page 122
 Product Life Cycle Theory......Page 124
 Intraindustry Trade......Page 126
 Increasing Returns and Imperfect Competition......Page 129
 Conclusions......Page 132
 Summary......Page 133
 References......Page 134
Chapter 6 Tariffs......Page 135
 The Gains from Free Trade......Page 136
 Tariffs: an Introduction......Page 138
 Tariffs: An Economic Analysis......Page 142
 The Gains from Free Trade: One More Time......Page 144
 The Welfare Cost of Tariffs......Page 146
 Export Tariff......Page 149
 Global Insights 6.1: The Welfare Costs of Tariffs: Estimates from CertainU.S. Industries......Page 150
 Global Insights 6.2: Argentine Export Tariffs......Page 152
 The Optimal Tariff*......Page 153
 Global Insights 6.3: The Smoot-Hawley Tariff and Its Aftermath......Page 156
 How High Are Tariffs?......Page 157
 Exercises......Page 159
 References......Page 160
Chapter 7 Nontariff Barriers and Arguments forProtection......Page 161
 Quotas......Page 162
 The Welfare Effects of Quotas......Page 164
 The Equivalence or Nonequivalence of Tariffs and Quotas......Page 166
 Government Procurement Policies......Page 168
 Technical Barriers to Trade......Page 169
 Health and Safety Standards......Page 170
 Failure to Protect Intellectual Property Rights*......Page 171
 Export Subsidies......Page 172
 Invalid Arguments......Page 173
 Valid Arguments......Page 175
 Global Insights 7.1Trade, Technology, and U.S. Pollution......Page 184
 Summary......Page 187
 References......Page 188
Chapter 8 Commercial Policy: History and Practice......Page 189
 History of U.S. Commercial Policy......Page 190
 Global Insights 8.1: The GATT Agreement......Page 194
 The Uruguay Round and the Creation of the WTO......Page 197
 Trade Policy Case Study 1: U.S. Tuna Quotas to Save Dolphins......Page 199
 The Doha Round......Page 200
 The Conduct of U.S. Commercial Policy......Page 201
 Dumping......Page 202
 Antidumping Law......Page 203
 Countervailing Duty Law......Page 206
 Unfair Foreign Practices: Section 301......Page 207
 Trade Policy Case Study 2: The International Bananas Dispute......Page 208
 The Escape Clause: Section 201......Page 209
 Other Measures......Page 210
 Trade Policy Case Study 3: Tire Imports from China......Page 211
 Comparisons with Policies in Other Countries......Page 212
 Summary......Page 213
 References......Page 214
Chapter 9 Preferential Trade Arrangements......Page 215
 Preferential Trade Arrangements: Economic Analysis......Page 217
 North American Free Trade Agreement......Page 219
 Global Insights 9.1: Details of the NAFTA......Page 220
 Other U.S. Free-Trade Area Agreements......Page 223
 The EU Government......Page 225
 The Single Market Initiative......Page 226
 Global Insights 9.2: Other Preferential Trade Arrangements......Page 228
 Exercises......Page 230
 References......Page 231
Chapter 10 International Trade and Economic Growth......Page 232
 Primary-Export-Led Development Policies......Page 233
 Import-Substitution Development Policies......Page 236
 Trade and Growth*......Page 237
 Technological Change......Page 243
 Growth, Prices, and Welfare......Page 244
 Global Insights 10.1: The Dutch Disease......Page 245
 Labor......Page 246
 Capital......Page 248
 Global Insights 10.2: U.S. Outsourcing......Page 251
 Summary......Page 254
 References......Page 255
Chapter 11 The Balance of Payments......Page 256
 Introduction to Balance-of-Payments Accounting......Page 257
 Current Account Entries......Page 259
 Financial Accounts Entries......Page 260
 Measures of The Balance of Payments......Page 262
 Current Account Balance......Page 263
 Global Insights 11.1: Is the U.S. Current Account Deficit Sustainable?......Page 265
 Official Settlements Balance......Page 266
 Transactions Classifications......Page 267
 Balance-of-Payments Equilibrium and Adjustment......Page 269
 Exercises......Page 270
 References......Page 271
Chapter 12 The Foreign-Exchange Market......Page 272
 Spot Rates......Page 274
 Forward Rates......Page 276
 Arbitrage......Page 277
 Foreign Currency Options......Page 280
 The Foreign-Exchange Market and the Balance of Payments (BOP)......Page 281
 Exercises......Page 284
 References......Page 285
Chapter 13 International Monetary Systems......Page 286
 The Gold Standard: 1880–1914......Page 287
 The Interwar Period: 1918–1939......Page 290
 The Bretton Woods System: 1944–1973......Page 292
 Today’s International Monetary System: 1973–Present......Page 296
 The European Monetary System and the Euro*......Page 300
 The Choice of An Exchange Rate System......Page 302
 Exercises......Page 305
 References......Page 306
Chapter 14 Exchange Rates in the Short Run......Page 307
 Exchange Rate Behavior......Page 309
 Uncovered Interest Rate Parity......Page 311
 Example 1......Page 312
 Example 2......Page 313
 Expected Exchange Rates and the Term structure Of Interest Rates......Page 314
 Tests of Uncovered Interest Rate Parity......Page 316
 Global Insights 14.1: The Carry Trade......Page 317
 Exercises......Page 318
Chapter 15 Exchange Rates in the Long Run......Page 320
 An Introduction to Purchasing Power Parity......Page 321
 Tests of Purchasing Power Parity......Page 324
 Global Insights 15.1: Big Mac PPP......Page 325
 The Monetary Approach to Exchange Rates......Page 327
 Exercises......Page 329
 References......Page 330
Chapter 16 Theories of the Current Account......Page 331
 The Elasticities Approach to the Current Account......Page 332
 The Currency-Contract Period......Page 335
 The Evidence from Devaluations......Page 337
 Global Insights 16.1: The Pass-Through Effect and Profits......Page 338
 The Absorption Approach......Page 339
 The Intertemporal Model......Page 340
 A Look at U.S. Data......Page 344
 Exercises......Page 346
 References......Page 347
Chapter 17 Open-Economy Macroeconomics......Page 348
 Modeling the Macroeconomy......Page 349
 Example 1......Page 354
 Internal External Balance......Page 356
 International Policy Coordination......Page 359
 Global Insights 17.1: The Plaza Agreement......Page 360
 Global Insights 17.2: The G20......Page 362
 Exercises......Page 363
 The IS Curve......Page 364
 The LM Curve......Page 366
 The BP Curve......Page 367
 Equilibrium......Page 368
 Monetary Policy Under Fixed Exchange Rates......Page 369
 Monetary Policy Under Floating Exchange Rates......Page 370
 Fiscal Policy Under Floating Exchange Rates......Page 371
 References......Page 372
Chapter 18 International Banking, Debt, and Risk......Page 373
 The Origins of Offshore Banking......Page 374
 Global Insights 18.1: A Black Swan in the Financial Market......Page 376
 International Banking Facilities......Page 377
 Offshore Banking Practices......Page 378
 International Debt......Page 380
 Global Insights 18.2: The Eurozone Crisis......Page 382
 IMF Conditionality......Page 383
 The Role of Corruption......Page 385
 Country-Risk Analysis......Page 386
 Summary......Page 387
 References......Page 388
Glossary......Page 389
 B......Page 394
 C......Page 395
 D......Page 396
 E......Page 397
 F......Page 398
 H......Page 399
 I......Page 400
 L......Page 401
 M......Page 402
 P......Page 403
 R......Page 404
 T......Page 405
 U......Page 406
 W......Page 407
 Z......Page 408