国际经济学第五章PPT
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Chapter 5
The Standard Trade Model
Chapter Organization
Introduction A Standard Model of a Trading Economy International Transfers of Income: Shifting the RD
depends on the tastes of its consumers, which can be represented graphically by a series of indifference curves.
2016/11/29
Copyright © 西南财经大学 吴晓东
Slide 5-9
D2
D1
Q1 Q2 VV1(PC/PF)1 TT
2016/11/29
VV2(PC/PF)2 Cloth production, QC
Slide 5-13
Copyright © 西南财经大学 吴晓东
A Standard Model of a Trading Economy
The Welfare Effect of Changes in the Terms of Trade
Copyright © 西南财经大学 吴晓东
Slide 5-4
A Standard Model of a Trading Economy
The standard trade model is built on four key
relationships:
• Production possibility frontier and the relative supply
curve • Relative prices and relative demand • World relative supply and world relative demand • Terms of trade and national welfare
2016/11/29
Copyright © 西南财经大学 吴晓东
– It is possible that the income effect will be so strong that when PC/PF rises, consumption of both goods actually rises, while the ratio of cloth consumption to food consumption falls.
Slide 5-3
Those models share s number of
features:
• The productive capacity of an economy can be
The standard trade model is a general model of trade
2016/11/29
Copyright © 西南财经大学 吴晓东
Slide 5-10
A Standard Model of a Trading Economy
Figure 5-3: Production, Consumption, and Trade in the Standard Model
Food production, QF
Curve Tariffs and Export Subsidies: Simultaneous Shifts in RS and RD Summary Appendix: Representing International Equilibrium with Offer Curves
2016/11/29
Food production, QF
Q1
VV1(PC/PF)1
Q2
TT
2016/11/29
VV2(PC/PF)2 Cloth production, QC
Slide 5-8
Copyright © 西南财经大学 吴晓东
A Standard Model of a Trading Economy
Relative Prices and Demand
– Downward sloping – The farther up and to the right each lies, the higher the level of welfare to which it corresponds – Each gets flatter as we move to the right
• The value of an economy's consumption equals the
value of its production: PCQC + PFQF = PCDC + PFDF = V
• The economy’s choice of a point on the isovalue line
Slide 5-5
A Standard Model of a Trading Economy
Production Possibilities and Relative Supply
• Assumptions of the model:
– Each country produces two goods, food (F) and cloth (C) – Each country’s production possibility frontier is a smooth curve (TT)
Copyright © 西南财经大学 吴晓东
Slide 5-2
Introduction
Previous trade theories have emphasized specific
sources of comparative advantage which give rise to international trade:
that admits these models as special cases.
2016/11/29
summarized by its production possibility frontier • Production possibilities determine a country’s relative supply schedule • World equilibrium is determined by world relative demand and a world relative supply schedule that lies between the national relative supply schedules.
• To determine PC/PF , one must find the intersection of
2016/11/29
Copyright © 西南财经大学 吴晓东
Slide 5-12
A Standard Model of a Trading Economy
Figure 5-4: Effects of a Rise in the Relative Price of Cloth
Food production, QF
A Standard Model of a Trading Economy
• Indifference curves
– Each traces a set of combinations of cloth (C) and food (F) consumption that leave the individual equally well off – They have three properties:
• Terms of trade
– The price of the good a country initially exports divided by the price of the good it initially imports. – A rise in the terms of trade increases a country’s welfare, while a decline in the terms of trade reduces its welfare.
Indifference curves D Food imports Q
TT
2016/11/29
Cloth exports
Cloth production, QC
Slide 5-11
Copyright © 西南财经大学 吴晓东
A Standard Model of a Trading Economy
• Differences in labor productivity (Ricardian model) • Differences in resources (specific factors model and
Heckscher-Ohlin model)
2016/11/29
Copyright © 西南财经大学 吴晓东
• The point on its production possibility frontier at
which an economy actually produces depends on the price of cloth relative to food, PC/PF. • Isovalue lines
– Its terms of trade are measured by PF/PC – Its quantities of cloth and food produced are Q*C and Q*F
2016/11Leabharlann Baidu29
Copyright © 西南财经大学 吴晓东
Slide 5-15
A Standard Model of a Trading Economy
– Lines along which the market value of output is constant
2016/11/29
Copyright © 西南财经大学 吴晓东
Slide 5-6
A Standard Model of a Trading Economy
Figure 5-1: Relative Prices Determine the Economy’s Output
2016/11/29
Copyright © 西南财经大学 吴晓东
Slide 5-14
A Standard Model of a Trading Economy
Determining Relative Prices
• Suppose that the world economy consists of two countries:
– Home (which exports cloth)
– Its terms of trade are measured by PC/PF – Its quantities of cloth and food produced are QC and QF
– Foreign (which exports food)
Food production, QF
Isovalue lines Q
TT
2016/11/29
Cloth production, QC
Slide 5-7
Copyright © 西南财经大学 吴晓东
A Standard Model of a Trading Economy
Figure 5-2: How an Increase in the Relative Price of Cloth Affects Relative Supply
• If the relative price of cloth, PC/PF , increases, the
– The move from D1 to D2 reflects two effects:
– Income effect – Substitution effect
economy’s consumption choice shifts from D1 to D2.
The Standard Trade Model
Chapter Organization
Introduction A Standard Model of a Trading Economy International Transfers of Income: Shifting the RD
depends on the tastes of its consumers, which can be represented graphically by a series of indifference curves.
2016/11/29
Copyright © 西南财经大学 吴晓东
Slide 5-9
D2
D1
Q1 Q2 VV1(PC/PF)1 TT
2016/11/29
VV2(PC/PF)2 Cloth production, QC
Slide 5-13
Copyright © 西南财经大学 吴晓东
A Standard Model of a Trading Economy
The Welfare Effect of Changes in the Terms of Trade
Copyright © 西南财经大学 吴晓东
Slide 5-4
A Standard Model of a Trading Economy
The standard trade model is built on four key
relationships:
• Production possibility frontier and the relative supply
curve • Relative prices and relative demand • World relative supply and world relative demand • Terms of trade and national welfare
2016/11/29
Copyright © 西南财经大学 吴晓东
– It is possible that the income effect will be so strong that when PC/PF rises, consumption of both goods actually rises, while the ratio of cloth consumption to food consumption falls.
Slide 5-3
Those models share s number of
features:
• The productive capacity of an economy can be
The standard trade model is a general model of trade
2016/11/29
Copyright © 西南财经大学 吴晓东
Slide 5-10
A Standard Model of a Trading Economy
Figure 5-3: Production, Consumption, and Trade in the Standard Model
Food production, QF
Curve Tariffs and Export Subsidies: Simultaneous Shifts in RS and RD Summary Appendix: Representing International Equilibrium with Offer Curves
2016/11/29
Food production, QF
Q1
VV1(PC/PF)1
Q2
TT
2016/11/29
VV2(PC/PF)2 Cloth production, QC
Slide 5-8
Copyright © 西南财经大学 吴晓东
A Standard Model of a Trading Economy
Relative Prices and Demand
– Downward sloping – The farther up and to the right each lies, the higher the level of welfare to which it corresponds – Each gets flatter as we move to the right
• The value of an economy's consumption equals the
value of its production: PCQC + PFQF = PCDC + PFDF = V
• The economy’s choice of a point on the isovalue line
Slide 5-5
A Standard Model of a Trading Economy
Production Possibilities and Relative Supply
• Assumptions of the model:
– Each country produces two goods, food (F) and cloth (C) – Each country’s production possibility frontier is a smooth curve (TT)
Copyright © 西南财经大学 吴晓东
Slide 5-2
Introduction
Previous trade theories have emphasized specific
sources of comparative advantage which give rise to international trade:
that admits these models as special cases.
2016/11/29
summarized by its production possibility frontier • Production possibilities determine a country’s relative supply schedule • World equilibrium is determined by world relative demand and a world relative supply schedule that lies between the national relative supply schedules.
• To determine PC/PF , one must find the intersection of
2016/11/29
Copyright © 西南财经大学 吴晓东
Slide 5-12
A Standard Model of a Trading Economy
Figure 5-4: Effects of a Rise in the Relative Price of Cloth
Food production, QF
A Standard Model of a Trading Economy
• Indifference curves
– Each traces a set of combinations of cloth (C) and food (F) consumption that leave the individual equally well off – They have three properties:
• Terms of trade
– The price of the good a country initially exports divided by the price of the good it initially imports. – A rise in the terms of trade increases a country’s welfare, while a decline in the terms of trade reduces its welfare.
Indifference curves D Food imports Q
TT
2016/11/29
Cloth exports
Cloth production, QC
Slide 5-11
Copyright © 西南财经大学 吴晓东
A Standard Model of a Trading Economy
• Differences in labor productivity (Ricardian model) • Differences in resources (specific factors model and
Heckscher-Ohlin model)
2016/11/29
Copyright © 西南财经大学 吴晓东
• The point on its production possibility frontier at
which an economy actually produces depends on the price of cloth relative to food, PC/PF. • Isovalue lines
– Its terms of trade are measured by PF/PC – Its quantities of cloth and food produced are Q*C and Q*F
2016/11Leabharlann Baidu29
Copyright © 西南财经大学 吴晓东
Slide 5-15
A Standard Model of a Trading Economy
– Lines along which the market value of output is constant
2016/11/29
Copyright © 西南财经大学 吴晓东
Slide 5-6
A Standard Model of a Trading Economy
Figure 5-1: Relative Prices Determine the Economy’s Output
2016/11/29
Copyright © 西南财经大学 吴晓东
Slide 5-14
A Standard Model of a Trading Economy
Determining Relative Prices
• Suppose that the world economy consists of two countries:
– Home (which exports cloth)
– Its terms of trade are measured by PC/PF – Its quantities of cloth and food produced are QC and QF
– Foreign (which exports food)
Food production, QF
Isovalue lines Q
TT
2016/11/29
Cloth production, QC
Slide 5-7
Copyright © 西南财经大学 吴晓东
A Standard Model of a Trading Economy
Figure 5-2: How an Increase in the Relative Price of Cloth Affects Relative Supply
• If the relative price of cloth, PC/PF , increases, the
– The move from D1 to D2 reflects two effects:
– Income effect – Substitution effect
economy’s consumption choice shifts from D1 to D2.