第一二三章ppt课件.ppt

DOMINICK SALVATORE,INTERNATIONAL ECONOMICS清华大学出版社（第版）年版,联系方式：,Email:武汉理工大学经济学院国际经济与贸易系,You can never teach a man anything,you can only help him discover it within himself.-Galilaeo,CHAPTER 1 INTERDUCTION,1.The Importance of International Trade2.The subject Matter of International Economics3.The purpose of study of international trade4.The difference between domestic trade and international trade5.Organization and Methodology of the Text,Small nations have a few very specialized resources;,Exports provide employment opportunities;,Many products cant be produced domestically at all;,They can get much more benefits or gains from trade;(be produced domestically at a higher cost than abroad),Exports provide earnings to pay for many foreign products(advanced technology not available at home),Why all the nations rely on international trade?,1.The Importance of International Trade,CASE STUDY:1-1 Even the IBM PC Is Not All-American1-2 The Rising Importance of International Trade to the United States.,MICROECONOMICS ASPECTS,MACROECONOMICS ASPECTS,International Economics,INTERNATIONAL TRADE THEORY,NEW PROTECTIONISM,INTERNATIONALTRADEPOLICY,BALANCE OFPAYMENTS,FOREIGNEXCHANGEMARKETS,ADJUSTMENT IN BALANCEOF PAYMENTS,2.The subject Matter of International Economics,3.The purpose of study of international trade,(1).In general,to predict and explain the economic events;So,some knowledge of International Economics is necessary to understand what goes on in the world of today.(2).On a practical level,the study of International Economics is required for numerous jobs in MNCs,international banking,government agencies,UNs,WB,IMF.,4.The difference between domestic trade and international trade,(1).different effect to economy development,(2).different environment,social and culture,law and economic policy,currency system,(3).difficult movement for factors of production among nations,(4).more risks when you do international business,exchange rate;,Politics.,Transportation;,CHAPTER 1 IntroductionCHAPTER 2 The law of comparative advantage CHAPTER 3 The standard theory of international tradeCHAPTER 4 Demand and supply,offer curves,and the terms of tradeCHAPTER 5 Factor endowments and the Heckscher-Ohlin theoryCHAPTER 6 Economics of scale,imperfect competition and international trade,5.Organization and Methodology of the TextPART I International Trade Theory,PART II International Trade Policy,CHAPTER 8 Trade restrictions:TariffsCHAPTER 9 Non-tariff trade barriers and new protectionismCHAPTER 10 Economic integration:Customs unions and free trade areas,Methodology:,TextCase studySummaryA look aheadKey terms12 questions12 problemsSelected bibliographyAppendix,1.Export of goods and services as a percentage of Gross National Product(GNP)of at least ten nations.2.Number 1,2,3,4 on page 163.Read“1.5 Current International Economic Problems”on page 9-12.,Homework:,Part I International Trade Theory(Chapter 27),CH2:Theory of comparative advantage;CH3:the basis and gains from trade under new analysis tools;CH4:equilibrium analysis with demand and supply;CH5:H-O theory;CH6:modern trade theory based on economics of scale;CH7:relationship between international trade and economic growth.,CHAPTER 2 THE LAW OF COMPARATIVE ADVANDAGE,2.1 Introduction2.2 The Mercantilisms Views On Trade 2.3 Trade Based On Absolute Advantage:Adam Smith2.4 Trade Based On Comparative Advantage:David Ricardo2.5 Comparative Advantage and Opportunity Cost2.6 The Basis for and the Gains from Trade Under Constant Cost,2.1 Introduction:Two basic questions,1.What is the basis for trade and what are the gains from trade?How are the gains generated?How large are the gains?How are the gains divided among trading nations?2.What is the pattern of trade?What commodities are traded?Which commodities are exported and imported by each nation?,2.2 The Mercantilists Views on Trade,Mercantilismthe preparation period of capitalism,prevailing during the seventeenth and eighteenth centuries,The central question was how a nation could regulate its domestic and international affairs so as to promote its own interests.The solution lay in a strong foreign trade sector.,Views:,2.2 The Mercantilists Views on Trade,3.To promote a favorable trade balance,the mercantilists advocated government regulation of trade.Tariffs,quotas,and other commercial policies were proposed to minimize imports.,2.If a country could achieve a favorable trade balance(a surplus of export over import),it would enjoy payments received from the rest of the world in the form of gold and silver.,A favorable trade balance was possible only in the a short time.One nations gains from trade came at the expense of its trade partner:not all nations could simultaneously enjoy the benefits of international trade.(Zero-sum game零和博弈)Balance of tradeTrade surplusTrade deficit,Strong attacks:,2.3 Trade based on absolute advantage:Adam Smith,How dose the mutually beneficial trade take place and from where do these gains from trade come?,Adam Smith,(17231790)a classical economist,was leading advocate of free trade(Laissez-Faire),“Inquiry into the Nature and causes of the Wealth of Nations”(1776)-The wealth of Nations,laissez-faire-the minimum government interference in or regulation of economic activity.,Trade is based on absolute advantage and benefits both nations.When each nation specializes in the production of the commodity of its absolute advantage and exchanges part of its output for the commodity of its absolute disadvantage,both nations end up consuming more of both commodities.,Basis for trade:,Absolute advantage:The greater efficiency that one nation may have over another in the production of a commodity.,The main view on trade,Pattern of trade:,Export-commodity of its absolute advantage;Import-commodity of its absolute disadvantage,For example:wheat and banana(Canada-Nicaragua),Canada:export wheat and import banana;Nicaragua:import wheat and export banana.,1.Most nations impose many restrictions on the free flow of international trade;2.Trade restrictions are rationalized in terms of national welfare;3.Trade restrictions are advocated by the few industries and their workers who are hurt by imports;,Historical background:Served the interest of factory owners and harmed landowners.It shows the link between social pressures and the development of new economic theories to support them.,Contrast with the real world:,Illustration:with a numerical example,wew:,Questions:,Which one is more efficient?,Which one has an absolute advantage over the other?,How to specialize in production and how to exchange?,How the gains are divided?,After specialization,and then exchange,Total gains are divided(in the terms of cloth):U.S.:1h produce 6W;trade 6C;gains:2C(1/2 hour);U.K.:1.2h produce 6C;trade 6W=6 hours 1.2hour=4.8 hours=24C.,Suppose the exchange rate:6W=6C,/6,/6,Illustration:a numerical example,Illustration:a numerical example,In U.K.use 2 hours to produce cloth only 10C and 0W;trade 6C to get 6W,gains 5W from trade;1W=5C domestically,so 5W=25C;on the other hand,10C 6C=4C,so at last the gains=25C1C=24C.In U.S.use 2 hours to produce wheat only 12W and 0C;trade 6W to get 6C,gains 2C from trade.,Before Specialization in production,5 Labor time-7X+3Y,After Specialization in production,5 Labor time-8X+6Y 7X+3Y,2.By this process,resources are utilized in the most efficient way and output of both commodities will rise.,3.This increase in the output of both commodities measures the gains from the specialization in production available to be divided between two nations through trade.,1.Both nations would benefit from trade simultaneously.,Conclusions:,4.All the nations would gain from free trade and advocate a policy of laissez-faire.,Limitations:,If a nation is less efficient than other nations in the production of all commodities(has absolute advantage for both commodities),how does it engage in international trade?,2.4 Trade Based on Comparative Advantage:David Ricardo,In 1817,Ricardo published his Principles of Political Economy and Taxation,in which he presented the law of comparative advantage.,Explains how mutually beneficial trade can take place even when one nation is less efficient than,or has an absolute disadvantage with respect to another nation in the production of all commodities.,He was born in 1772 and was the third of 17 children.His parents were very successful and his father was a wealthy merchant banker.They lived at first in the Netherlands and then moved to London.David himself had little formal education and went to work for his father at the age of 14.However,when,at the age of 21,he married a Quaker(against his parents wishes)he was disinherited and so set up on his own as a stockbroker.He was phenomenally successful at this and was able to retire at 42 and concentrate on his writings and politics.He developed many important areas of economic theory much of the theory he developed is still used and taught today.,Economist-David Ricardo(1772-1823),The U.K.has an absolute disadvantage in the production of both wheat and cloth with respect to the U.S.,Whose absolute advantage is greater?,U.S.W6:1;C4:2,U.K.W1/6;C2/4=1/2,Whose absolute disadvantage is smaller?,Illustration:with a numerical example,Smaller absolute disadvantage-comparative advantageEx:U.KCLOTHGreater absolute advantage-comparative advantageEx:U.S-WHEAT,（两利取其重，两害取其轻)The less efficient nation should specialize in and export the commodity in which its absolute disadvantage is smaller,and should import the other commodity.,Law of Comparative Advantage,The Gains from Trade,After specialization and then exchange(suppose 6W=6C),/6,/6,/6,/6,Suppose 6W=6CU.S.:1h produce 6W to trade 6C(domestic 1h=4C),so the gains is 2C(1/2h)U.K.:6C needs 3hours to produce,then trade 6W=6 hours to produce domestically;domestically 6hours=12C,so the gains is 6C(3hs),The Gains from Trade,If,U.S.would be indifferent or not to trade;If,U.K.would be indifferent or not to trade.,Exchange rate:,6W=4C,2C=1W,The range of exchange rate for mutually beneficial trade,So,the range is:4C6W12C,Ex:,6W=4C6W=6C6W=8C6W=10C6W=12C,The share of each nation:U.S.U.K.,0 8C,2C 6C,4C 4C,6C 2C,8C 0,The range of exchange rate for mutually beneficial trade,Exception to the Law of Comparative Advantage,One nation has an absolute advantage or disadvantage which is the same in both commodities with respect to another nation.,Ex:U.K.2C=3W,U.S.4C=6W,Exception to the Law of Comparative Advantage,Modification of the law of comparative advantage(P33):unless that the absolute disadvantage is in the same proportion for the two commodities.,How prevalent is it?,Its occurrence is rare and a matter of coincidence.,As half productive as U.S.in both commodities.Has a comparative in neither commodity.No mutually beneficial trade can take place.,WHY?,Comparative Advantage with Money,Question:Can the U.K.export anything to the U.S.if it is less efficient than the U.S.in the production of both commodities?,Suppose:the wage rate in U.S.is$6;the wage rate in U.K.is 1.,So,In U.S.Pw=$1,Pc=$1.5;In U.K.Pw=1,Pc=0.5,$2.00$1.00,Suppose the exchange rate is:$2=1;,Comparative Advantage with Money,Even though U.K.labor is half as productive as U.S.labor in cloth production,U.K.labor receives only 1/3 of the U.S.wage rate(1=$2/h;$6/h),so that the dollar price of cloth is lower in U.K.The inefficiency of U.K.labor relative to U.S.labor in cloth production is more than compensated for by the lower wages in U.K.,productivity difference:,1/6-1/2,Wage Rate,wage rate:1/61/2,Ex:$6/h in U.S.;2/h in U.K.,Suppose$1=1Suppose$3=1,In U.K.,exactly 1/6 of U.S.,In U.K.,exactly 1/2 of U.S.,How about the wage rate?$6(U.S.)1(U.K),The range of exchange rate:$11$3,Exchange Rate,Ex:1=$4,Conclusion:An absolute productivity advantage over other countries in producing a good is neither a necessary nor a sufficient condition for having a comparative advantage;The competitive advantage of an industry depends not only on its productivity relative to the foreign industry,but also on the domestic wage rate relative to the foreign wage rate.,Comparative Advantage with Money,A lot of simplifying assumptions:,a.only two nations and two commodities,b.free trade,c.perfect mobility of labor within each nation but immobility between the two nations,d.constant costs of production,e.no transportation costs,f.no technical change,g.the labor theory of value either labor is the only factor of production or labor is used in the same fixed proportion in the production of all commodities.labor is homogeneous,Labor theory of value:The cost or price of a commodity is determined by or inferred exclusively from its labor content.,Labor theory of value and Opportunity Costs,In 1936,Haberler Opportunity cost:The amount of a second commodity that must be given up to release just enough resources to produce one more unit of the first commodity.No assumption is here made that labor is the only factor of a commodity or labor is homogeneous.Nor is it assumed that the cost or price of a commodity depends on or can be inferred exclusively from its labor content.,In the U.S.A.6w/4c=1w/?=2/3(c),So the opportunity cost of wheat is two-thirds(2/3)of a unit of cloth.,In the U.K.1w/2c=1w/?=2 c,So the opportunity cost of wheat is two(2)of a unit of cloth,The opportunity cost of wheat is lower in the U.S.than in the U.K.,The united states would have a comparative cost advantage over the united kingdom in wheat.,The Production Possibility Frontier:(Transformation Curve)The alternative combination of the two commodities that a nation can produce by fully utilizing all of its resources with the best technology available to it.,The Production Possibility Frontier under Constant Cost,This schedule shows various alternative combinations of two goods that a nation can produce when all of its factor inputs(land,labor,capital,entrepreneurship)are used in their most efficient manner.,United States,Each point on a frontier,One combination of that the nation can produce;,Points inside the frontierPoints above the frontier,Possible but inefficient;,Impossible.,United Kingdom,The Production Possibility Frontier under Constant Cost,For each 30W that the United States gives up,just enough resources are released to produce an additional 20C.That is,30W=20C,so 1W=2/3C,Thus,the opportunity cost of one unit of wheat in the United States is 2/3C,Slope:downward,negative,Straight:constant opportunity,Not realistic,The Production Possibility Frontier under Constant Cost,Questions:1.the relationship between opportunity costs and the production possibility frontier.2.the relationship between opportunity costs and comparative advantage.,Opportunity Cost and Relative Commodity Price,MRT(marginal rate of transformation)the amount of one commodity that a nation must give up to produce each additional unit of another commodity.,Transformation curve MRT(given by the absolute slope of the production frontier)=the opportunity cost of wheat=relative commodity pr