International Trade: Theory and Policy

Cover
Title Page
Copyright
Brief Contents
Contents
Preface
Chapter 1. Introduction
	What Is International Economics About?
		The Gains from Trade
		The Pattern of Trade
		How Much Trade?
		Balance of Payments
		Exchange Rate Determination
		International Policy Coordination
		The International Capital Market
	International Economics: Trade and Money
Part 1: International Trade Theory
	Chapter 2. World Trade: An Overview
		Who Trades with Whom?
			Size Matters: The Gravity Model
			Using the Gravity Model: Looking for Anomalies
			Impediments to Trade: Distance, Barriers, and Borders
		The Changing Pattern of World Trade
			Has the World Gotten Smaller?
			What Do We Trade?
			Service Offshoring
		Do Old Rules Still Apply?
		Summary
	Chapter 3. Labor Productivity and Comparative Advantage: The Ricardian Model
		The Concept of Comparative Advantage
		A One-Factor Economy
			Production Possibilities
			Relative Prices and Supply
		Trade in a One-Factor World
			Determining the Relative Price after Trade
		Box: Comparative Advantage in Practice: The Case of Usain Bolt
			The Gains from Trade
			A Note on Relative Wages
		Box: Economic Isolation and Autarky Over Time and Over Space
		Misconceptions about Comparative Advantage
			Productivity and Competitiveness
		Box: Do Wages Reflect Productivity?
			The Pauper Labor Argument
			Exploitation
		Comparative Advantage with Many Goods
			Setting Up the Model
			Relative Wages and Specialization
			Determining the Relative Wage in the Multigood Model
		Adding Transport Costs and Nontraded Goods
		Empirical Evidence on the Ricardian Model
		Summary
	Chapter 4. Specific Factors and Income Distribution
		The Specific Factors Model
		Box: What is a Specific Factor?
			Assumptions of the Model
			Production Possibilities
			Prices, Wages, and Labor Allocation
			Relative Prices and the Distribution of Income
		International Trade in the Specific Factors Model
		Income Distribution and the Gains from Trade
		The Political Economy of Trade: A Preliminary View
			The Politics of Trade Protection
			Trade and Unemployment
		Case Study: U.S. Manufacturing Employment and Chinese Import Competition
		Box: The Trump Trade War
		International Labor Mobility
		Case Study: Immigration and the U.S. Economy
		Summary
		Appendix To Chapter 4: Further Details on Specific Factors
			Marginal and Total Product
			Relative Prices and the Distribution of Income
	Chapter 5. Resources and Trade: The Heckscher-Ohlin Model
		Model of a Two-Factor Economy
			Prices and Production
			Choosing the Mix of Inputs
			Factor Prices and Goods Prices
			Resources and Output
		Effects of International Trade between Two-Factor Economies
			Relative Prices and the Pattern of Trade
			Trade and the Distribution of Income
		Case Study: North-South Trade and Income Inequality
			Skill-Biased Technological Change and Income Inequality
		Box: The Declining Labor Share of Income and Capital-Skill Complementarity
			Factor-Price Equalization
		Empirical Evidence on the Heckscher-Ohlin Model
			Trade in Goods as a Substitute for Trade in Factors: Factor Content of Trade
			Patterns of Exports between Developed and Developing Countries
			Implications of the Tests
		Summary
		Appendix To Chapter 5: Factor Prices, Goods Prices, and Production Decisions
			Choice of Technique
			Goods Prices and Factor Prices
			More on Resources and Output
	Chapter 6. The Standard Trade Model
		A Standard Model of a Trading Economy
			Production Possibilities and Relative Supply
			Relative Prices and Demand
			The Welfare Effect of Changes in the Terms of Trade
		Box: U.S. Consumer Gains from Chinese Imports
			Determining Relative Prices
			Economic Growth: A Shift of the RS Curve
			Growth and the Production Possibility Frontier
			World Relative Supply and the Terms of Trade
			International Effects of Growth
		Case Study: Has the Growth of Newly Industrialized Economies Hurt Advanced Nations?
		Box: The Exposure of Developing Countries to Terms of Trade Shocks and the COVID-19 Pandemic
		Tariffs and Export Subsidies: Simultaneous Shifts in RS and RD
			Relative Demand and Supply Effects of a Tariff
			Effects of an Export Subsidy
			Implications of Terms of Trade Effects: Who Gains and Who Loses?
		International Borrowing and Lending
			Intertemporal Production Possibilities and Trade
			The Real Interest Rate
			Intertemporal Comparative Advantage
		Summary
		Appendix To Chapter 6: More on Intertemporal Trade
	Chapter 7. External Economies of Scale and the International Location of Production
		Economies of Scale and International Trade: An Overview
		Economies of Scale and Market Structure
		The Theory of External Economies
		Specialized Suppliers
		Labor Market Pooling
		Knowledge Spillovers
			External Economies and Market Equilibrium
		External Economies and International Trade
			External Economies, Output, and Prices
			External Economies and the Pattern of Trade
			Trade and Welfare with External Economies
		Box: Holding the World Together
			Dynamic Increasing Returns
		Interregional Trade and Economic Geography
		Box: The City and the Street
		Summary
	Chapter 8. Firms in the Global Economy: Export and Foreign Sourcing Decisions and Multinational Enterprises
		The Theory of Imperfect Competition
			Monopoly: A Brief Review
			Monopolistic Competition
		Monopolistic Competition and Trade
			The Effects of Increased Market Size
			Gains from an Integrated Market: A Numerical Example
			The Significance of Intra-Industry Trade
		Case Study: Automobile Intra-Industry Trade within ASEAN-4: 1998–2002
		Firm Responses to Trade: Winners, Losers, and Industry Performance
			Performance Differences across Producers
			The Effects of Increased Market Size
		Trade Costs and Export Decisions
		Dumping
		Case Study: Antidumping as Protectionism
		Multinationals and Foreign Direct Investment
			Patterns of Foreign Direct Investment Flows around the World
		Case Study: COVID-19 and Foreign Direct Investment Flows around the World
		Foreign Direct Investment and Foreign Sourcing Decisions
			The Horizontal FDI Decision
			The Foreign Sourcing Decision
			The Outsourcing Decision: Make or Buy
		Box: Whose Trade Is It?
		Case Study: Shipping Jobs Overseas? Offshoring and Labor Market Outcomes in Germany
			Consequences of Multinationals and Foreign Outsourcing
		Summary
		Appendix To Chapter 8: Determining Marginal Revenue
Part 2: International Trade Policy
	Chapter 9. The Instruments of Trade Policy
		Basic Tariff Analysis
			Supply, Demand, and Trade in a Single Industry
			Effects of a Tariff
			Measuring the Amount of Protection
		Costs and Benefits of a Tariff
			Consumer and Producer Surplus
			Measuring the Costs and Benefits
		Case Study: Winners and Losers of the Trump Trade War
		Box: Tariffs and Retaliation
		Other Instruments of Trade Policy
			Export Subsidies: Theory
		Box: The Unfriendly Skies: Settling the Longest Running Trade Dispute
			Import Quotas: Theory
		Case Study: Tariff-Rate Quota Origin and its Application in Practice with Oilseeds
			Voluntary Export Restraints
			Local Content Requirements
		Box: Healthcare Protection with Local Content Requirements
			Other Trade Policy Instruments
		The Effects of Trade Policy: A Summary
		Summary
		Appendix To Chapter 9: Tariffs and Import Quotas in the Presence of Monopoly
			The Model with Free Trade
			The Model with a Tariff
			The Model with an Import Quota
			Comparing a Tariff and a Quota
	Chapter 10. The Political Economy of Trade Policy
		The Case for Free Trade
			Free Trade and Efficiency
			Additional Gains from Free Trade
			Rent Seeking
			Political Argument for Free Trade
		National Welfare Arguments against Free Trade
			The Terms of Trade Argument for a Tariff
			The Domestic Market Failure Argument against Free Trade
			How Convincing Is the Market Failure Argument?
		Income Distribution and Trade Policy
			Electoral Competition
			Collective Action
		Box: Politicians for Sale: Evidence from the 1990s
			Modeling the Political Process
			Who Gets Protected?
		International Negotiations and Trade Policy
			The Advantages of Negotiation
			International Trade Agreements: A Brief History
			The Uruguay Round
			Trade Liberalization
			Administrative Reforms: From the GATT to the WTO
			Benefits and Costs
		Box: Settling a Dispute—and Creating One
		Case Study: Testing the WTO’s Metal
		The End of Trade Agreements?
		Box: Do Agricultural Subsidies Hurt the Third World?
			Preferential Trading Agreements
		Box: Free Trade Area Versus Customs Union
		Box: Brexit
		Case Study: Trade Diversion in South America
			The Trans-Pacific Partnership
		Summary
		Appendix To Chapter 10: Proving That the Optimum Tariff Is Positive
			Demand and Supply
			The Tariff and Prices
			The Tariff and Domestic Welfare
	Chapter 11. Trade Policy in Developing Countries
		Import-Substituting Industrialization
			The Infant Industry Argument
			Promoting Manufacturing through Protection
		Case Study: Export-Led Strategy
		Results of Favoring Manufacturing: Problems of Import-Substituting Industrialization
		Trade Liberalization since 1985
		Trade and Growth: Takeoff in Asia
		Box: India’s Boom
		Summary
	Chapter 12. Controversies in Trade Policy
		Sophisticated Arguments for Activist Trade Policy
			Technology and Externalities
			Imperfect Competition and Strategic Trade Policy
		Box: A Warning From Intel’s Founder
		Case Study: When the Chips Were Up
		Globalization and Low-Wage Labor
			The Anti-Globalization Movement
			Trade and Wages Revisited
			Labor Standards and Trade Negotiations
			Environmental and Cultural Issues
			The WTO and National Independence
		Case Study: A Tragedy in Bangladesh
		Globalization and the Environment
			Globalization, Growth, and Pollution
			The Problem of “Pollution Havens”
			The Carbon Tariff Dispute
		Trade Shocks and Their Impact on Communities
		Summary
	Mathematical Postscripts
		Postscript to Chapter 5: The Factor-Proportions Model
			Factor Prices and Costs
			Goods Prices and Factor Prices
			Factor Supplies and Outputs
		Postscript to Chapter 6: The Trading World Economy
			Supply, Demand, and Equilibrium
			Supply, Demand, and the Stability of Equilibrium
			Effects of Changes in Supply and Demand
			Economic Growth
			A Transfer of Income
			A Tariff
		Postscript to Chapter 8: The Monopolistic Competition Model
		Merchandise Trade Flows with the United States (in 2018 U.S. dollars)
		Gross National Product per Capita (in 2019 U.S. dollars)
Index
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