Chapter 1 | Introduction to the World Economy | 1 |
1 | Why Study International Economics? | 1 |
2 | What Do We Mean by International Interdependence? | 2 |
3 | The Economic Significance of Political Boundaries | 12 |
4 | Studying International Economics | 13 |
| International Microeconomics | |
Chapter 2 | Comparative Advantage I: Labor Productivity and Trade | 18 |
1 | Introduction | 18 |
2 | Early Thinking about Trade: The Mercantilists | 19 |
3 | The Decline of Mercantilism (and the Birth of Economics) | 19 |
4 | Keeping Things Simple: Some Assumptions | 20 |
5 | The Ricardian World without Trade | 21 |
6 | The Ricardian World with Trade | 26 |
7 | The Gains from Trade: Exchange and Specialization | 35 |
8 | Using Demand and Supply to Analyze Trade | 37 |
Case 1 | Can the Ricardian Model Really Explain Trade? | 40 |
Case 2 | Does Labor Productivity Really Vary? | 42 |
Case 3 | Which Plants Export? | 43 |
Appendix | What Can the World Produce? The World Production Possibilities Frontier | 49 |
Chapter 3 | Comparative Advantage II: Factor Endowments and Trade | 51 |
1 | Introduction | 51 |
2 | The Neoclassical World without Trade | 52 |
3 | The Neoclassical World with Trade | 60 |
4 | Sources of Comparative Advantage | 64 |
Case 1 | Lights-Out Factories | 67 |
Case 2 | From Fish to Information Technology | 68 |
Case 3 | Socks: Made in USA | 68 |
Case 4 | Can Heckscher-Ohlin Explain China's Trade? | 69 |
Appendix A | The Edgeworth Box | 74 |
Appendix B | Offer Curves | 78 |
Chapter 4 | Trade, Distribution, and Welfare | 81 |
1 | Introduction | 81 |
2 | How Do Output Prices Affect Factor Prices? The Stolper-Samuelson Theorem | 81 |
3 | How Do Factor Prices Vary Across Countries? The Factor Price Equalization Theorem | 85 |
4 | What if Factors Are Immobile in the Short Run? The Specific-Factors Model | 92 |
5 | Trade and Welfare: Gainers, Losers, and Compensation | 97 |
Case 1 | Trade and Wages I: Asia | 101 |
Case 2 | Trade and Wages II: The United States | 102 |
Case 3 | Deja Vu: Learning from the History of the World Economy | 104 |
Case 4 | A Rare Opportunity: Learning from Japanese Economic History | 104 |
Chapter 5 | Beyond Comparative Advantage: Empirical Evidence and New Trade Theories | 110 |
1 | Introduction | 110 |
2 | Questions to Be Answered | 110 |
3 | How Do We Know if a Theory about Trade Is Correct? | 111 |
4 | Testing the Heckscher-Ohlin Model | 112 |
5 | Intra-Industry Trade | 115 |
6 | Trade with Economies of Scale | 120 |
7 | Technology-Based Theories of Trade: The Product Cycle | 129 |
8 | Overlapping Demands as a Basis for Trade | 131 |
9 | Transport Costs as a Determinant of Trade | 133 |
10 | Location of Industry | 136 |
Case 1 | Trade and Sir Isaac Newton's Apples | 137 |
Case 2 | Are there Economies of Scale? | 137 |
Case 3 | Around the World in 22 Days | 139 |
Chapter 6 | Tariffs | 145 |
1 | Introduction | 145 |
2 | Why Would a Country Impose a Tariff? | 145 |
3 | Types of Tariffs and Ways to Measure Them | 147 |
4 | What Happens When a Small Country Imposes an Import Tariff? | 150 |
5 | What Happens When a Large Country Imposes an Import Tariff? | 156 |
6 | How Does a Tariff Affect Factor Prices? Specific Factors and Stolper-Samuelson | 160 |
7 | Tariffs and Economies of Scale | 160 |
8 | The Effective Rate of Protection | 163 |
9 | Offshore Assembly Provisions | 164 |
10 | Taxing Exports | 164 |
Case 1 | Making Cheap Medicine Expensive | 168 |
Case 2 | Binding Policy Makers' Hands | 168 |
Case 3 | China, Tariffs, and the WTO | 170 |
Appendix A | Offer Curves and Tariffs | 175 |
Appendix B | General-Equilibrium Tariff Effects in a Small Country | 178 |
Chapter 7 | Nontariff Barriers | 180 |
1 | Introduction | 180 |
2 | Quotas | 180 |
3 | Comparison of Import Tariffs and Quotas | 183 |
4 | Export Quotas | 184 |
5 | Subsidies and Countervailing Duties | 188 |
6 | Dumping | 195 |
7 | Administrative and Technical Standards | 201 |
8 | How Can We Measure Nontariff Barriers? | 206 |
Case 1 | Shooting Down the Byrd Amendment | 207 |
Case 2 | Cotton Pits Farmer versus Farmer | 208 |
Chapter 8 | Arguments for Restricting Trade | 212 |
1 | Introduction | 212 |
2 | Categories of Arguments for Trade Restrictions | 212 |
3 | What about "Infant" Industries? | 213 |
4 | What If Markets Aren't Competitive? | 217 |
5 | What If There Are Externalities? | 225 |
6 | Shouldn't the "Playing Field" Be Level? | 232 |
7 | How Can We Compete with Low-Wage Countries? | 232 |
8 | How Do We Handle National Security and Defense? | 233 |
9 | Aren't Goods and Money Better than Just Goods? | 234 |
10 | Can We Threaten Other Countries into Trade Liberalization? | 235 |
Case 1 | Sticky Business in Singapore | 237 |
Case 2 | No, the Other Type of Dumping | 237 |
Case 3 | Spawning a Trade Dispute | 238 |
Case 4 | MITI Miracles? | 239 |
Case 5 | Science, or Politics? | 240 |
Chapter 9 | The Political Economy of Trade Policy and Borders | 244 |
1 | Introduction | 244 |
2 | The Political Economy of National Trade Policy | 245 |
3 | How Did We Get Here? A Brief History of International Trade Policy | 247 |
4 | Economic Integration and Regional Trading | 256 |
5 | Interregional Trade | 269 |
Case 1 | NAFTA Traffic Jams | 272 |
Case 2 | I.D. Cards for Avocados | 273 |
Case 3 | All in the Family | 274 |
Case 4 | Is Japan Being Left Out? | 275 |
Chapter 10 | Growth, Immigration, and Multinationals | 279 |
1 | Introduction | 279 |
2 | Economic Growth I: More Inputs | 282 |
3 | Economic Growth II: More Productivity | 289 |
4 | What if Factors Can Move? | 292 |
Case 1 | Growth Myths and Miracles | 317 |
Case 2 | How Big Are They? | 319 |
Case 3 | Saving, Investment, and Intertemporal Trade | 319 |
Case 4 | Send Money | 320 |
Chapter 11 | Development, Transition, and Trade | 325 |
1 | Introduction | 325 |
2 | Defining Development | 326 |
3 | Development Issues | 330 |
4 | Agriculture, Industry, or Both? | 331 |
5 | North-South Issues | 337 |
6 | Developing Markets: Economies in Transition | 351 |
Case 1 | Does Aid Aid Growth? | 359 |
Case 2 | Does Policy Matter? The Two Koreas | 360 |
Case 3 | Open to Development | 362 |
Case 4 | Reproducing Pharmaceuticals | 363 |
Case 5 | Oil Junkies? | 364 |
Case 6 | WTO Member or Market Economy? | 365 |
| International Macroeconomics | |
Chapter 12 | Currency Markets and Exchange Rates | 370 |
1 | Introduction | 370 |
2 | Exchange Rates and Prices | 370 |
3 | Foreign Exchange Markets | 372 |
4 | Interest Parity | 379 |
5 | Demand and Supply in the Foreign Exchange Market | 386 |
6 | How Are Exchange Rates Determined under a Flexible-Rate Regime? | 389 |
7 | How Are Exchange Rates Determined under a Fixed-Rate Regime? | 392 |
8 | The Effective Exchange Rate | 394 |
9 | Offshore Currency Markets | 395 |
Case 1 | Multinationals and Foreign Exchange | 397 |
Case 2 | Picking Stocks Means Picking Currencies | 399 |
Case 3 | Herstatt Risk | 400 |
Case 4 | Foreign Exchange Market Update | 401 |
Chapter 13 | The Balance-of-Payments Accounts | 406 |
1 | Introduction | 406 |
2 | What's in the Balance-of-Payments Accounts? | 408 |
3 | What Are Balance-of-Payments Surpluses and Deficits? | 418 |
4 | What's the Connection? The Balance of Payments and the Foreign Exchange Market | 420 |
Case 1 | The U.S.-China Trade Deficit: $10 Billion or $40 Billion? | 427 |
Case 2 | The United States as a Debtor | 428 |
Case 3 | Rest of Galaxy Enjoys Current-Account Surplus | 430 |
Case 4 | World Merchandise Trade | 430 |
Chapter 14 | The Market for Goods and Services in an Open Economy | 436 |
1 | Introduction | 436 |
2 | How Do We Measure a Country's Output? | 437 |
3 | What Determines Output and Income in an Open Economy? | 438 |
4 | How Does International Trade Affect the Market for Goods and Services? | 444 |
5 | What Causes Changes in the Market for Goods and Services? | 447 |
6 | Interdependence: Protectionism, Income, and the Current Account | 454 |
7 | The "Twin Deficits" | 455 |
8 | A Concise Graphical Summary: The IS Curve | 457 |
Case 1 | Components of GDP | 459 |
Case 2 | The Peso and Mexico-U.S. Trade | 460 |
Case 3 | The Macroeconomics of German Unification | 462 |
Chapter 15 | Money, the Banking System, and Foreign Exchange | 466 |
1 | Introduction | 466 |
2 | Money in the World Economy | 466 |
3 | Banking Crises | 482 |
4 | Foreign Exchange | 492 |
5 | Bringing It All Together | 498 |
6 | How a Flexible Exchange Rate Regime Works | 499 |
7 | How a Fixed Exchange Rate Regime Works | 502 |
Case 1 | Trying to Get the Best of Both Worlds | 507 |
Case 2 | Where the Foreign Exchange Reserves Are | 508 |
Case 3 | Birth of a Currency | 509 |
Case 4 | Banking on Unification | 510 |
Chapter 16 | Short-Run Macroeconomic Policy under Fixed Exchange Rates | 514 |
1 | Introduction | 514 |
2 | Macroeconomic Goals in an Open Economy | 516 |
3 | Macroeconomic Policy with Immobile Capital | 519 |
4 | Macroeconomic Policy with Perfectly Mobile Capital | 527 |
5 | Macroeconomic Policy with Imperfectly Mobile Capital | 537 |
6 | A Special Case: The Reserve-Currency Country | 539 |
Case 1 | More on German Unification | 542 |
Case 2 | Betting Against the Baht | 543 |
Case 3 | Pesos and Tequila | 544 |
Case 4 | The Two Faces of Capital Flows | 545 |
Case 5 | Paying the Bills | 548 |
Case 6 | Pegged, But to What? | 549 |
Case 7 | Capital Decontrols | 550 |
Chapter 17 | Short-Run Macroeconomic Policy under Flexible Exchange Rates | 555 |
1 | Introduction | 555 |
2 | Macroeconomic Policy with Immobile Capital | 558 |
3 | Macroeconomic Policy with Perfectly Mobile Capital | 561 |
4 | Macroeconomic Policy with Imperfectly Mobile Capital | 567 |
5 | The Policy Mix | 570 |
6 | Summary of Short-Run Policy Effectiveness Under a Flexible Exchange Rate | 575 |
Case 1 | The Japan Slump | 576 |
Case 2 | Policy Squeezes: To Do, or Not to Do? | 578 |
Case 3 | Floating the Pound | 579 |
Case 4 | The Budget and the Dollar | 580 |
Case 5 | The Truth about Exchange Rate Regimes | 582 |
Chapter 18 | The Exchange Rate in Long-Run Equilibrium | 587 |
1 | Introduction | 587 |
2 | Money in Long-Run Equilibrium | 588 |
3 | Purchasing Power Parity | 593 |
4 | The Monetary Approach to the Exchange Rate | 600 |
5 | The Real Exchange Rate | 606 |
6 | Long-Run Equilibrium Exchange Rates | 610 |
7 | More on Why Interest Rates Differ | 611 |
Case 1 | Tank-Touristen | 613 |
Case 2 | Purchasing Power Parity at Home? | 613 |
Case 3 | Nontraded Goods and the Real Exchange Rate | 614 |
Case 4 | Dry Cleaning in Oslo and Karachi | 616 |
Chapter 19 | Prices and Output in an Open Economy | 620 |
1 | Introduction | 620 |
2 | Apples versus GDP: Supply in Micro- and Macroeconomics | 623 |
3 | Aggregate Demand under Fixed Exchange Rates | 624 |
4 | Long-Run Aggregate Supply | 627 |
5 | Medium-Run Aggregate Supply | 630 |
6 | Combining Aggregate Demand and Aggregate Supply | 633 |
7 | Macroeconomic Policy under Fixed Exchange Rates | 634 |
8 | Aggregate Demand under Flexible Exchange Rates | 641 |
9 | Macroeconomic Policies under Flexible Exchange Rates | 642 |
10 | Supply Shocks | 646 |
Case 1 | Unemployment-Structural and Cyclical | 648 |
Case 2 | The Ups and Downs of Business Cycles | 650 |
Appendix | The Aggregate Demand Curve | 656 |
Chapter 20 | International Monetary Regimes | 658 |
1 | Introduction | 658 |
2 | What Does a Monetary Regime Need to Do? |
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The World Economy: Trade and Finance (with Economic Applications Printed Access Card), By presenting the fundamentals of international economics clearly with a strong presentation of theory, policy and applications, THE WORLD ECONOMY: TRADE AND FINANCE is an excellent choice for a broad range of trade and finance courses with an internation, The World Economy: Trade and Finance (with Economic Applications Printed Access Card) to the inventory that you are selling on WonderClub
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The World Economy: Trade and Finance (with Economic Applications Printed Access Card), By presenting the fundamentals of international economics clearly with a strong presentation of theory, policy and applications, THE WORLD ECONOMY: TRADE AND FINANCE is an excellent choice for a broad range of trade and finance courses with an internation, The World Economy: Trade and Finance (with Economic Applications Printed Access Card) to your collection on WonderClub
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