International Trade - Theory and Policy

by Anonymous

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This text is built on the belief that to understand the international economy, students need to learn how economic models are applied to real world problems. It is true what they say, that ”economists do it with models.“ That's because economic models provide insights about the world that are simply not obtainable solely by discussion of the issues. A variety of international trade models including the Ricardian, Heckscher-Ohlin, and the monopolistic competition models are presented.

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Publisher
LibreTexts
Subjects
Social Sciences, Economics
Licence
CC BY-NC-SA 3.0, as LibreTexts states it. Non-commercial use only.
Who can read
Teens profiles and older, judged from its title and subjects

Contents

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  1. Front Matter
  2. TitlePage
  3. InfoPage
  4. Table of Contents
  5. Licensing
  6. 1: Introductory Trade Issues - History, Institutions, and Legal Framework
  7. 1.1: The International Economy and International Economics
  8. 1.2: Understanding Tariffs
  9. 1.3: Recent Trade Controversies
  10. 1.4: The Great Depression, Smoot-Hawley, and the Reciprocal Trade Agreements Act (RTAA)
  11. 1.5: The General Agreement on Tariffs and Trade (GATT)
  12. 1.6: The Uruguay Round
  13. 1.7: The World Trade Organization
  14. 1.8: Appendix A- Selected U.S. Tariffs - 2009
  15. 1.9: Appendix B- Bound versus Applied Tariffs
  16. 2: The Ricardian Theory of Comparative Advantage
  17. 2.1: The Reasons for Trade
  18. 2.2: The Theory of Comparative Advantage- Overview
  19. 2.3: Ricardian Model Assumptions
  20. 2.4: The Ricardian Model Production Possibility Frontier
  21. 2.5: Definitions- Absolute and Comparative Advantage
  22. 2.6: A Ricardian Numerical Example
  23. 2.7: Relationship between Prices and Wages
  24. 2.8: Deriving the Autarky Terms of Trade
  25. 2.9: The Motivation for International Trade and Specialization
  26. 2.10: Welfare Effects of Free Trade- Real Wage Effects
  27. 2.11: The Welfare Effects of Free Trade- Aggregate Effects
  28. 2.12: Appendix- Robert Torrens on Comparative Advantage
  29. 3: The Pure Exchange Model of Trade
  30. 3.1: A Simple Pure Exchange Economy
  31. 3.2: Determinants of the Terms of Trade
  32. 3.3: Example of a Trade Pattern
  33. 3.4: Three Traders and Redistribution with Trade
  34. 3.5: Three Traders with International Trade
  35. 3.6: The Nondiscrimination Argument for Free Trade
  36. 4: Factor Mobility and Income Redistribution
  37. 4.1: Factor Mobility Overview
  38. 4.2: Domestic Factor Mobility
  39. 4.3: Time and Factor Mobility
  40. 4.4: Immobile Factor Model Overview and Assumptions
  41. 4.5: The Production Possibility Frontier in the Immobile Factor Model
  42. 4.6: Autarky Equilibrium in the Immobile Factor Model
  43. 4.7: Depicting a Free Trade Equilibrium in the Immobile Factor Model
  44. 4.8: Effect of Trade on Real Wages
  45. 4.9: Intuition of Real Wage Effects
  46. 4.10: Interpreting the Welfare Effects
  47. 4.11: Aggregate Welfare Effects of Free Trade in the Immobile Factor Model
  48. 5: The Heckscher-Ohlin (Factor Proportions) Model
  49. 5.1: Chapter Overview
  50. 5.2: Heckscher-Ohlin Model Assumptions
  51. 5.3: The Production Possibility Frontier (Fixed Proportions)
  52. 5.4: The Rybczynski Theorem
  53. 5.5: The Magnification Effect for Quantities
  54. 5.6: The Stolper-Samuelson Theorem
  55. 5.7: The Magnification Effect for Prices
  56. 5.8: The Production Possibility Frontier (Variable Proportions)
  57. 5.9: The Heckscher-Ohlin Theorem
  58. 5.10: Depicting a Free Trade Equilibrium in the Heckscher-Ohlin Model
  59. 5.11: National Welfare Effects of Free Trade in the Heckscher-Ohlin Model
  60. 5.12: The Distributive Effects of Free Trade in the Heckscher-Ohlin Model
  61. 5.13: The Compensation Principle
  62. 5.14: Factor-Price Equalization
  63. 5.15: The Specific Factor Model- Overview
  64. 5.16: The Specific Factor Model
  65. 5.17: Dynamic Income Redistribution and Trade
  66. 6: Economies of Scale and International Trade
  67. 6.1: Chapter Overview
  68. 6.2: Economies of Scale and Returns to Scale
  69. 6.3: Gains from Trade with Economies of Scale- A Simple Explanation
  70. 6.4: Monopolistic Competition
  71. 6.5: Model Assumptions: Monopolistic Competition
  72. 6.6: The Effects of Trade in a Monopolistically Competitive Industry
  73. 6.7: The Costs and Benefits of Free Trade Under Monopolistic Competition
  74. 7: Trade Policy Effects with Perfectly Competitive Markets
  75. 7.1: Basic Assumptions of the Partial Equilibrium Model
  76. 7.2: Depicting a Free Trade Equilibrium- Large and Small Country Cases
  77. 7.3: The Welfare Effects of Trade Policies- Partial Equilibrium
  78. 7.4: Import Tariffs - Large Country Price Effects
  79. 7.5: Import Tariffs- Large Country Welfare Effects
  80. 7.6: The Optimal Tariff
  81. 7.7: Import Tariffs- Small Country Price Effects
  82. 7.8: Import Tariffs- Small Country Welfare Effects
  83. 7.9: Retaliation and Trade Wars
  84. 7.10: Import Quotas- Large Country Price Effects
  85. 7.11: Administration of an Import Quota
  86. 7.12: Import Quota- Large Country Welfare Effects
  87. 7.13: Import Quota- Small Country Price Effects
  88. 7.14: Import Quota- Small Country Welfare Effects
  89. 7.15: The Choice between Import Tariffs and Quotas
  90. 7.16: Export Subsidies: Large Country Price Effects
  91. 7.17: Export Subsidies: Large Country Welfare Effects
  92. 7.18: Countervailing Duties
  93. 7.19: Voluntary Export Restraints (VERs): Large Country Price Effects
  94. 7.20: Administration of a Voluntary Export Restraint
  95. 7.21: Voluntary Export Restraints: Large Country Welfare Effects
  96. 7.22: Export Taxes- Large Country Price Effects
  97. 7.23: Export Taxes- Large Country Welfare Effects
  98. 8: Domestic Policies and International Trade
  99. 8.1: Chapter Overview
  100. 8.2: Domestic Production Subsidies
  101. 8.3: Production Subsidies as a Reason for Trade
  102. 8.4: Production Subsidy Effects in a Small Importing Country
  103. 8.5: Domestic Consumption Taxes
  104. 8.6: Consumption Taxes as a Reason for Trade
  105. 8.7: Consumption Tax Effects in a Small Importing Country
  106. 8.8: Equivalence of an Import Tariff with a Domestic (Consumption Tax plus Production Subsidy)
  107. 9: Trade Policies with Market Imperfections and Distortions
  108. 9.1: Chapter Overview
  109. 9.2: Imperfections and Distortions Defined
  110. 9.3: The Theory of the Second Best
  111. 9.4: Unemployment and Trade Policy
  112. 9.5: The Infant Industry Argument and Dynamic Comparative Advantage
  113. 9.6: The Case of a Foreign Monopoly
  114. 9.7: Monopoly and Monopsony Power and Trade
  115. 9.8: Public Goods and National Security
  116. 9.9: Trade and the Environment
  117. 9.10: Economic Integration- Free Trade Areas, Trade Creation, and Trade Diversion
  118. 10: Political Economy and International Trade
  119. 10.1: Chapter Overview
  120. 10.2: Some Features of a Democratic Society
  121. 10.3: The Economic Effects of Protection: An Example
  122. 10.4: The Consumers' Lobbying Decision
  123. 10.5: The Producers' Lobbying Decision
  124. 10.6: The Government's Decision
  125. 10.7: The Lobbying Problem in a Democracy
  126. 11: Evaluating the Controversy between Free Trade and Protectionism
  127. 11.1: Introduction
  128. 11.2: Economic Efficiency Effects of Free Trade
  129. 11.3: Free Trade and the Distribution of Income
  130. 11.4: The Case for Selected Protection
  131. 11.5: The Economic Case against Selected Protection
  132. 11.6: Free Trade as the "Pragmatically Optimal" Policy Choice
  133. Back Matter
  134. Index
  135. Glossary
  136. Detailed Licensing