International economics

Cover......Page 1
Title Page......Page 6
Copyright Page......Page 7
Brief Contents......Page 8
Contents......Page 10
Preface......Page 18
PART 1 Introduction and Institutions......Page 26
  Introduction: International Economic Integration......Page 27
  Elements of International Economic Integration......Page 28
   The Growth of World Trade......Page 29
   Capital and Labor Mobility......Page 31
   Features of Contemporary International Economic Relations......Page 33
   Trade and Economic Growth......Page 35
   Wages, Jobs, and Protection (Chapters 3, 6, 7, and 8)......Page 36
   The Resolution of Trade Conflicts (Chapters 2, 7, and 8)......Page 37
   Financial Crises and Global Contagion (Chapter 12)......Page 38
   Export-Led Growth in East Asia (Chapter 16)......Page 39
  Study Questions......Page 40
   International Institutions......Page 42
   A Taxonomy of International Economic Institutions......Page 43
   The IMF and World Bank......Page 44
   The GATT, the Uruguay Round, and the WTO......Page 45
   CASE STUDY: The GATT Rounds......Page 47
   Five Types of Regional Trade Agreements......Page 48
   CASE STUDY: Prominent Regional Trade Agreements......Page 49
   Regional Trade Agreements and the WTO......Page 51
   For and Against RTAs......Page 52
  The Role of International Economic Institutions......Page 53
   Maintaining Order and Reducing Uncertainty......Page 54
   CASE STUDY: Bretton Woods......Page 56
   Sovereignty and Transparency......Page 58
   Ideology......Page 59
   Implementation and Adjustment Costs......Page 60
   CASE STUDY: China’s Alternative to the IMF and World Bank: The AIIB......Page 61
  Summary......Page 62
  Vocabulary......Page 63
  Study Questions......Page 64
PART 2 International Trade......Page 66
   Adam Smith and the Attack on Economic Nationalism......Page 67
   Absolute Productivity Advantage and the Gains from Trade......Page 69
   CASE STUDY: Gains from Trade in Nineteenth-Century Japan......Page 71
  Comparative Productivity Advantage and the Gains from Trade......Page 72
   The Production Possibilities Curve......Page 73
   The Consumption Possibilities Curve......Page 74
   The Gains from Trade......Page 75
   Domestic Prices and the Trade Price......Page 77
  Absolute and Comparative Productivity Advantage Contrasted......Page 78
  Gains from Trade with No Absolute Advantage......Page 79
   CASE STUDY: Changing Comparative Advantage in the Republic of Korea, 1960–2010......Page 80
  Comparative Advantage and “Competitiveness”......Page 82
  Economic Restructuring......Page 83
   CASE STUDY: Losing Comparative Advantage......Page 85
  Vocabulary......Page 87
  Study Questions......Page 88
  Introduction: The Determinants of Comparative Advantage......Page 90
   The HO Trade Model......Page 91
   Gains from Trade in the HO Model......Page 92
  Trade and Income Distribution......Page 95
   The Stolper-Samuelson Theorem......Page 96
   The Specific Factors Model......Page 98
   CASE STUDY: Comparative Advantage in a Single Natural Resource......Page 100
  Empirical Tests of the Theory of Comparative Advantage......Page 101
  Extension of the HO Model......Page 102
   The Product Cycle......Page 103
   CASE STUDY: United States–China Trade......Page 105
   Foreign Trade versus Foreign Investment......Page 106
   Off-Shoring and Outsourcing......Page 108
   CASE STUDY: Off-Shoring by U.S. Multinational Corporations......Page 109
   Migration and Trade......Page 110
  The Impact of Trade on Wages and Jobs......Page 112
   CASE STUDY: Do Trade Statistics Give a Distorted Picture of Trade Relations? The Case of the iPhone 3G......Page 114
  Summary......Page 115
  Vocabulary......Page 116
  Study Questions......Page 117
  Introduction: More Reasons to Trade......Page 119
  Intraindustry Trade......Page 120
   Characteristics of Intraindustry Trade......Page 121
   The Gains from Intraindustry Trade......Page 123
   CASE STUDY: United States and Canada Trade......Page 125
   Geography, Transportation Costs, and Internal Economics of Scale......Page 126
   CASE STUDY: The Shifting Geography of Mexico’s Manufacturing......Page 127
   External Economies of Scale......Page 128
   Trade and External Economies......Page 129
  Industrial Policy......Page 130
   Industrial Policies and Market Failure......Page 131
   Industrial Policy Tools......Page 133
   CASE STUDY: Clean Energy and Industrial Policy......Page 134
   Problems with Industrial Policies......Page 135
   CASE STUDY: Do the WTO Rules Against Industrial Policies Hurt Developing Countries?......Page 136
   SCM Agreement......Page 137
  Summary......Page 138
  Study Questions......Page 139
   Analysis of a Tariff......Page 141
   Consumer and Producer Surplus......Page 142
   Prices, Output, and Consumption......Page 143
   Resource Allocation and Income Distribution......Page 145
   CASE STUDY: A Comparison of Tariff Rates......Page 147
   Other Potential Costs......Page 149
   The Large Country Case......Page 150
   Effective Versus Nominal Rates of Protection......Page 151
   CASE STUDY: The Uruguay and Doha Rounds......Page 152
  Analysis of Quotas......Page 154
   The Effect on the Profits of Foreign Producers......Page 155
   Hidden Forms of Protection......Page 157
   CASE STUDY: Intellectual Property Rights and Trade......Page 158
  Vocabulary......Page 160
  Study Questions......Page 161
  Introduction: Commercial Policy, Tariffs, and Arguments for Protection......Page 163
  Tariff Rates in the World’s Major Traders......Page 164
  The Costs of Protectionism......Page 166
   The Logic of Collective Action......Page 167
   CASE STUDY: Agricultural Subsidies......Page 168
   Revenue......Page 170
   The Labor Argument......Page 171
   The Infant Industry Argument......Page 172
   The Retaliation Argument......Page 173
   CASE STUDY: Traditional Knowledge and Intellectual Property......Page 174
   Antidumping Duties......Page 176
   Escape Clause Relief......Page 178
   CASE STUDY: Economic Sanctions......Page 179
  Summary......Page 181
  Study Questions......Page 182
  Introduction: Income and Standards......Page 183
  Setting Standards: Harmonization, Mutual Recognition, or Separate?......Page 184
   CASE STUDY: Income, Environment, and Society......Page 186
  Labor Standards......Page 187
   Defining Labor Standards......Page 188
   CASE STUDY: Child Labor......Page 189
   Labor Standards and Trade......Page 191
   Evidence on Low Standards as a Predatory Practice......Page 192
   CASE STUDY: The International Labour Organization......Page 193
   Transboundary and NonTransboundary Effects......Page 195
   CASE STUDY: Trade Barriers and Endangered Species......Page 197
  Alternatives to Trade Measures......Page 198
   Labels for Exports......Page 199
   Requiring Home Country Standards......Page 200
   Increasing International Negotiations......Page 201
   CASE STUDY: Global Climate Change......Page 202
  Summary......Page 204
  Study Questions......Page 205
PART 3 International Finance......Page 208
  Introduction: The Current Account......Page 209
   The Current and Capital Account Balances......Page 210
   MyLab Economics Real-time Data......Page 212
   Types of Financial Flows......Page 213
   MyLab Economics Real-time Data......Page 214
   Limits on Financial Flows......Page 219
   CASE STUDY: The Crisis of 2007–2009 and the Balance of Payments......Page 220
  The Current Account and the Macroeconomy......Page 221
   The National Income and Product Accounts......Page 222
   Are Current Account Deficits Harmful?......Page 227
   CASE STUDY: Current Account Deficits in the United States......Page 228
  International Debt......Page 230
   CASE STUDY: Odious Debt......Page 231
  The International Investment Position......Page 233
  Summary......Page 234
  Study Questions......Page 235
  APPENDIX A: Measuring the International Investment Position......Page 236
   Balance of Payments Statistics......Page 237
  APPENDIX C: A Note on Numbers......Page 238
  Introduction: Fixed, Flexible, or In-Between?......Page 239
  Exchange Rates and Currency Trading......Page 240
   Reasons for Holding Foreign Currencies......Page 241
   Institutions......Page 242
   Exchange Rate Risk......Page 243
   Supply and Demand with Flexible Exchange Rates......Page 244
   Exchange Rates in the Long Run......Page 245
   Exchange Rates in the Medium Run and Short Run......Page 249
   CASE STUDY: The Largest Market in the World......Page 253
  The Real Exchange Rate......Page 255
  Alternatives to Flexible Exchange Rates......Page 257
   Fixed Exchange Rate Systems......Page 258
   CASE STUDY: The End of the Bretton Woods System......Page 261
  Choosing the Right Exchange Rate System......Page 263
   CASE STUDY: Monetary Unions......Page 265
   Single Currency Areas......Page 267
   Conditions for Adopting a Single Currency......Page 268
   CASE STUDY: Is the NAFTA Region an Optimal Currency Area?......Page 270
  Summary......Page 271
  Study Questions......Page 272
  APPENDIX: The Interest Rate Parity Condition......Page 273
  Introduction: The Macroeconomy in a Global Setting......Page 275
  Aggregate Demand and Aggregate Supply......Page 276
   Fiscal Policy......Page 281
   Monetary Policy......Page 282
   CASE STUDY: Fiscal and Monetary Policy during the Great Depression......Page 284
  Current Account Balances Revisited......Page 287
   Fiscal and Monetary Policies, Interest Rates, and Exchange Rates......Page 288
   Fiscal and Monetary Policy and the Current Account......Page 289
   The Long Run......Page 291
   CASE STUDY: Argentina and the Limits to Macroeconomic Policy......Page 292
   The Adjustment Process......Page 294
   CASE STUDY: The Adjustment Process in the United States......Page 296
  Macroeconomic Policy Coordination in Developed Countries......Page 297
  Summary......Page 298
  Vocabulary......Page 299
  Study Questions......Page 300
  Introduction: The Challenge to Financial Integration......Page 301
  Definition of a Financial Crisis......Page 302
  Vulnerabilities, Triggers, and Contagion......Page 304
   Vulnerability: Economic Imbalances......Page 305
   Vulnerability: Volatile Capital Flows......Page 306
   How Crises Become International: Contagion......Page 307
   CASE STUDY: The Mexican Peso Crisis of 1994 and 1995......Page 308
  Domestic Issues in Crisis Avoidance......Page 311
   Moral Hazard and Financial Sector Regulation......Page 312
   Capital Controls......Page 313
   CASE STUDY: The Asian Crisis of 1997 and 1998......Page 315
   Domestic Policies for Crisis Management......Page 319
  Reform of the International Financial Architecture......Page 320
   A Lender of Last Resort......Page 321
   Conditionality......Page 322
   Reform Urgency......Page 323
   CASE STUDY: The Global Crisis of 2007......Page 324
  Summary......Page 327
  Study Questions......Page 329
PART 4 Regional Issues in the Global Economy......Page 332
  Introduction: A Changing World Economy......Page 333
  Background and Context......Page 334
   The Shifting Focus of U.S. Trade Relations......Page 335
   CASE STUDY: Manufacturing in the United States......Page 336
   Demographic and Economic Characteristics of North America......Page 339
   Canada–U.S. Trade Relations......Page 340
   Mexican Economic Reforms......Page 342
   The North American Free Trade Agreement......Page 344
   Two NAFTA-Specific Issues......Page 345
   CASE STUDY: Ejidos, Agriculture, and NAFTA in Mexico......Page 347
  New and Old Agreements......Page 349
   Labor and Environmental Standards......Page 350
   Investor-State Relations......Page 352
   Jobs and Trade Agreements......Page 353
   CASE STUDY: The African Growth and Opportunity Act......Page 355
  Summary......Page 356
  Vocabulary......Page 357
  Study Questions......Page 358
  Introduction: The European Union......Page 359
  The Size of the European Market......Page 361
  The European Union and its Predecessors......Page 362
   Institutional Structure......Page 363
   Before the Euro......Page 365
  The Second Wave of Deepening: The Single European Act......Page 367
   CASE STUDY: The Schengen Agreement......Page 368
   The Delors Report......Page 369
   Forecasts of the Gains from the Single European Act......Page 370
   Problems in the Implementation of the SEA......Page 371
   CASE STUDY: The Erasmus+ Program and Higher Education......Page 373
  The Third Wave of Deepening: The Maastricht Treaty......Page 374
   Monetary Union and the Euro......Page 375
   Costs and Benefits of Monetary Union......Page 376
   The Political Economy of the Euro......Page 378
   CASE STUDY: The Financial Crisis of 2007–2009 and the Euro......Page 379
   New Members......Page 383
   CASE STUDY: Spain’s Switch from Emigration to Immigration......Page 384
  The Demographic Challenge of the Future......Page 385
  Summary......Page 387
  Study Questions......Page 388
  Introduction: Defining a “Latin American” Economy......Page 390
  Population, Income, and Economic Growth......Page 391
   Origins and Goals of ISI......Page 393
   Criticisms of ISI......Page 396
   CASE STUDY: ISI in Mexico......Page 397
  Macroeconomic Instability and Economic Populism......Page 399
   Populism in Latin America......Page 400
   CASE STUDY: Economic Populism in Peru, 1985–1990......Page 401
   Proximate Causes of the Debt Crisis......Page 402
   Responses to the Debt Crisis......Page 403
   Stabilization Policies to Control Inflation......Page 406
   Structural Reform and Open Trade......Page 408
   CASE STUDY: Regional Trade Blocs in Latin America......Page 409
   The Next Generation of Reforms......Page 411
   CASE STUDY: The Chilean Model......Page 412
  Summary......Page 414
  Study Questions......Page 415
  Introduction: High-Growth Asian Economies......Page 417
  Population, Income, and Economic Growth......Page 419
   Shared Growth......Page 421
   Rapid Accumulation of Physical and Human Capital......Page 422
   Rapid Growth of Manufactured Exports......Page 423
   Stable Macroeconomic Environments......Page 424
   The Institutional Environment......Page 425
   CASE STUDY: Worldwide Governance Indicators......Page 426
   CASE STUDY: Doing Business in the Export Oriented Asian Economies......Page 428
   Avoiding Rent Seeking......Page 430
   CASE STUDY: Were East Asian Economies Open?......Page 432
   Targeting Specific Industries......Page 434
   Did Industrial Policies Work?......Page 435
   CASE STUDY: HCI in Korea......Page 437
   The Connections between Growth and Exports......Page 438
   Is Export Promotion a Good Model for Other Regions?......Page 440
   CASE STUDY: Asian Trade Blocs......Page 441
  Is There an Asian Model of Economic Growth?......Page 442
  Summary......Page 444
  Study Questions......Page 445
  Introduction: New Challenges......Page 446
  Demographic and Economic Characteristics......Page 447
   Economic Reform in China and India......Page 451
   The Reform Process in China......Page 452
   Indian Economic Reforms......Page 453
   Shifting Comparative Advantages......Page 454
   CASE STUDY: Why Did the USSR Collapse and China Succeed?......Page 456
  China and India in the World Economy......Page 457
   Chinese and Indian Trade Patterns......Page 458
   Tariffs and Protection......Page 459
   Current Account Balances......Page 460
   Looking Forward......Page 462
   Services......Page 464
   Manufacturing......Page 465
   Multilateral Institutions......Page 466
   Unresolved Issues......Page 467
   The Choices Ahead......Page 468
   Summary......Page 469
   Study Questions......Page 470
Glossary......Page 472
 A......Page 484
 C......Page 485
 E......Page 488
 F......Page 491
 G......Page 492
 H......Page 493
 I......Page 494
 L......Page 496
 M......Page 497
 N......Page 498
 P......Page 499
 R......Page 500
 S......Page 501
 T......Page 502
 W......Page 504
 Z......Page 505