Overview of Section I
International Trade Theory
Section I of the text is comprid of six chapters:
Chapter 2 Labor Productivity and Comparative Advantage: The Ricardian Model
Chapter 3 Specific Factors and Income Distribution
Chapter 4 Resources and Trade: The Heckscher-Ohlin Model
Chapter 5 The Standard Trade Model
computerscience>anarchismChapter 6 Economies of Scale, Imperfect Competition, and International Trade
led是什么意思Chapter 7 International Factor Movements
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T Section I Overview
Section I of the text prents the theory of international trade. The intent of this ction is to explore the
motives for and implications of patterns of trade between countries. The prentation proceeds by introducing successively more general models of trade, where the generality is provided by increasing the
number of factors ud in production, by increasing the mobility of factors of production across ctors
of the economy, by introducing more general technologies applied to production, and by examining
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different types of market structure. Throughout Section I, policy concerns and current issues are ud to
emphasize the relevance of the theory of international trade for interpreting and understanding our economy.
Chapter 2 gives a brief overview of world trade. In particular, it discuss what we know about the drawer
quantities and pattern of world trade today. The chapter us the empirical relationship known
as the
gravity model as a framework to describe trade. This framework describes trade as a function of the size of the economies involved and their distance. It can then be ud to e where countries are trading more or less than expected. The chapter also notes the growth in world trade over the previous decades and us
the previous era of globalization (pre-WWI) as context for today’s experience.
Chapter 3 introduces you to international trade theory through a framework known as the Ricardian model
一切顺利英文of trade. This model address the issue of why two countries would want to trade with each other. This
model shows how mutually-beneficial trade aris when there are two countries, each with one factor of production which can be applied toward producing each of two goods. Key concepts are introduced, such as the production possibilities frontier, comparative advantage versus absolute advantage, gains from trade, relative prices, and relative wages across countries.
4 Krugman/Obstfeld • International Economics: Theory and Policy, Seventh Edition
Chapter 4 introduces what is known as the classic Heckscher-Ohlin model of international trade.
Using this framework, you can work through the effects of trade on wages, prices and output. Many important and intuitive results are derived in this chapter including: the Rybczynski Theorem, the
Stolper-Samuelson Theorem, and the Factor Price Equalization Theorem. Implications of the Heckscher-Ohlin model for the pattern of trade among countries are discusd, as are the failures of empirical evidence to confirm the predictions of the theory. The chapter also introduces questions of political economy in trade. One important reason for this addition to the model is to consider the effects of trade on income distribution. This approach shows that while nations generally gain from international trade, it is quite possible that specific groups within the nations could be harmed by this trade. This discussion, and related questions about protectionism versus globalization, becomes broader and even more interesting as you work through the models and different assumptions of subquent chapters.
Chapter 5 prents a general model of international trade which admits the models of the previous chapters as special cas. This “standard trade model” is depicted graphically by a general equilibrium trade model as applied to a small open economy. Relative demand and relative supply curves are ud to analyze a variety of policy issues, such as the effects of economic growth, the transfer problem, and the effects of trade tariffs and production subsidies. The appendix to the chapter develops offer curve analysis.
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2018年12月四级答案While an extremely uful tool, the standard model of trade fails to account for some important aspects of international trade. Specifically, while the factor proportions Heckscher-Ohlin theories explain some trade flows between countries, recent rearch in international economics has placed an increasing emphasis on economies of scale in production and imperfect competition among firms.
Chapter 6 prents models of international trade that reflect the developments. The chapter begins by reviewing the concept of monopolistic competition among firms, and then showing the gains from trade which ari in such imperfectly competitive markets. Next, internal and external economies of scale in production and comparative advantage are discusd. The chapter continues with a discussion of the importance of intra-industry trade, d
flamingoumping, and external economies of production. The subject matter of this chapter is important since it shows how gains from trade ari in ways that are not suggested by the standard, more traditional models of international trade. The subject matter also is enlightening given the incread emphasis on intra-industry trade in industrialized countries.
Chapter 7 focus on international factor mobility. This departs from previous chapters which assumed
that the factors of production available for production within a country could not leave a country’s borders. Reasons for and the effects of international factor mobility are discusd in the context of a one-factor (labor) production and trade model. The analysis of the international mobility of labor motivates a further discussion of international mobility of capital. The international mobility of capital takes the form of international borrowing and lending. This facilitates the discussion of inter-temporal production
choices and foreign direct investment behavior.
