国际经济学复习要点(修改)

The theory of absolute advantage：In a two-nation, two-product world , international trade and specialization will be beneficial when one nation has an absolute cost advantage in one good and the other nation has an absolute cost advantage in the other good.The theory of comparative advantage：The more efficient nation should specialize in and export the goods in which it is re-latively more efficient. The less efficient nation should specialize in and export the goods in which it is relatively less in-efficient.Opportunity cost：opportunity cost is the amount of a good–machine-that must be given up to release enough resources to produce another good-cloth.terms of trade：it measures the relationship between the prices a nation gets for its exports and the prices it pays for its imports.terms of trade= (exports prices index)/(imports prices index) ×100%The theory of reciprocal demand suggests that the actual international exchange ratio at which trade takes place depends on each trading partner’s interact ing demands. The reciprocal demand theory indicates that the final international exchange ratio depends on the relative strength of each country’s demand for the other country’s product.If two countries are of unequal (population and income), it is possib le that the larger country’s demand would be greater than the smaller country’s demand. As a result, the smaller country gains from than the larger country.the factor-proportions theory: The H-O theory states that a county’s comparative advantage is determined by its initial resource entertainment.；A country will have a comparative advantage in goods whose intensively uses its relatively abundant factor of production. A country will have a comparative disadvantage in goods whose intensively uses its relatively scarce factor of production. factor-endowment ：shows amount of the factors of production in a country relative to the other country, such as labor, land, natural resources. It can be denoted by capital-to-labor ratio or K/L. If a country has a larger capital-to-labor ratio than another country , the country is a relatively capital- abundant country. Another country is a relatively labor- abundant country.Factor-price equalization theorem：states that international trade would equalize factor prices between countries . As such, in the long run, there is a tendency toward factor-price equalization. According to the H-O theory, a country will use abundant factors to produce comparative goods. Thus, the price of abundant factor will increase; the price of scarce factor will decrease. If this process occurs in both countries.Stolper-Samuelson theorem：:It states that free international trade effects on the distribution of income within a country .The abundant factor tend to receive a large share of national income. The reverse is true for the scarce factor. Keep in mind that although international trade improves a country’s total welfare, but the benefits are not distributed evenly. The factors are mobile between industries.The Specific-Factors Model：With the specific-factors model, as the demand for labor in the machine industry increase, the wage rate rises and works moves from the cloth industry to the machine industry. The owners of the specific capital used to produce machines benefit machine industry expanding. The owners of the specific capital used to produce cloth lose as cloth industry contracts. Workers are better off or worse off.Leontief paradox：Leontief found that U.S. exports were less capital-intensive than U.S. imports. even though the U.S. is the most capital-abundant country in the world.Explanation：Natural resources (oil, diamonds, copper)；Trade policies ( trade protectism )；Human capital (knowledge and skill)Interindustry trade：means countries trade different goods with one another.Intraindustry trade：means countries trade the same goods with one another.With intraindustry trade, a country simultaneously imports and exports the same good. The factor-endowment theory provides a basis for international trade but not intraindustry trade Intraindustry trade index (ITI) ：indicates the amount of intraindustry trade embodied in a country’s international trade. The major shortcoming of using ITI to measure the amount of intraindustry trade is that we get very different values for intraindustry trade depending on how we define the industry or product group. The Product Cycle ：new product, maturing product, standard product Overlapping Demands ：trade in manufactured goods is likely to be greatest among countries with similar tastes and income levels.W ithin a country, consumers’ average income level will determine their general tastes and preferencesin -overlapping demands implies that would be more intense among countries with similar income ， -in general, the theory of overlapping demands can explain the large and growing amount of trade in similar but differentiated goods.tariff ：A tariff is a tax on an imported good. The effects of a tariff are as follow: -revenue effect: raising government revenue -protective effect: insulating import-competing producers from foreign competition.Types of Tariffs ：Specific tariffs: Taxes that are levied as a fixed charge for each unit of goods imported Ad valorem tariffs: Taxes that are levied as a fraction of the value of the imported goods A compound tariff (duty)Consumer Surplus ：is the difference between the price consumers are willing to pay and the price that they actually pay.Producer Surplus ：is the difference between the price producers are willing to accept and the price that they receive.The effects of a Tariff for a small countryThe effects of a Tariff for a large country ：A tariff raises the price of a good in the importing country and lowers it in the exporting country.As a result of these price changes:Consumers lose in the importing country and gain in the exporting country. Producers gain in the importing country and lose in the exporting country. Government imposing the tariff gains revenueThe Effective Rate of Protection ：the percent-age increase in domestic value added made possible by the tariff. ERP=（Tf- aTc ）/(1-a)The effective rate of protection on final products in developed countries is higher than the nominal tariff posted in the tariff schedule. This tariff escalation encourages the final processing of imported inputs to occur in developed countries.This structure of protection discourage the processing of intermediate products into final goods in the foreign country where the intermediate products are products.Infant Industries ：It states that developing countries have a potential comparative advantage in manufacturing and they can realize that potential through an initial period of protection. （-It implies that it is a good idea to use tariffs or import quotas as temporary measures to get industrialization started ）Infant Government arguments ：imports legally must pass through customs.；not all citizens are poor, tariffs can be used as a income tax.；alter distribution of incomeSenile Industry Protection ：Temporary protection of old industries may increase outputNontariff barriers to trade (NTBs)：are government policies other than tariffs that tend to distort trade. These forms of protection are less visible but they have a significant impact on international trade in many industries.An import quota ：is a direct restriction on the quantity of a good that is imported.MX M X ITI +--=1The Economic Effects of a Quota：A quota placed on imported cloth raises of cloth from Pw to Pq. This higher price of cloth results in a decrease in consumer surplus. The welfare loss to the importing country consists of the production effect-triangle b, the consumption effect-triangle d, and the revenue effect-box c-that is captured by the foreign exporters.Reasons why quotas still exist in various forms:Not all countries are members of the WTO.New members are allowed to maintain their previously existing quotas.Some countries disobey the WTO rules.Trade in textiles and apparel is distorted by the MFA.Trade in agricultural products was not covered by WTO standard.Some countries introduced VEROther Nontariff Distortions：Other Nontariff Distortions First: industrial policy，An industrial policy is the effect of government regulation on the industrial structure of the country. Government favors one industry over another industry. Two: Government Procurement Government procurement laws are laws that direct a government to buy domestic goods unless comparable foreign goods are substantially cheaper. Three: Technical Barriers to Trade ，Technical barriers refer to a co untry’s national standards for health, safety, and product labeling.，Four: Subsidies ，An export subsidy is a direct (or indirect) payment from a country’s government to one or more of its export industries.Five: Labor and Environmental standards，The theory race to the bottom: companies will endlessly attempt to cut both labor and environment costs. This causes poor working condition and increasingly polluted global environment.The theory of public choice：states that politicians attempt to maximize their utility in the same way that consumers try to maximize their utility, or firms try to maximize their utility, or firms try to maximize profits.Utility maximization for a politician means maximizing the number of votes in the next electionSpecial interest groups：are groups which lobby for changes in laws and regulations that will benefit them.Most Favored Nation Principle (MFN)：it is a nondiscrimination principle means that any tariff cuts the U.S. agrees to with one country would apply to the products of all other trade partners that have most favored nation status.dumping：sell its product in an export market for less than it is sold for in its home market or for less than the cost of production. Cost-based dumping and price-basedAn antidumping law that does not allow a firm to sell its product in an export market for less than it is sold for in its home market or for less than the cost of productiontypes of dumping: -sporadic dumping (excess inventory) ；-persistent dumping (maximization of profits)；-predatory dumping (to drive domestic firms out of market)Principles of the WTO：Trade without discrimination.(equally“most-favoured- nation”or MFN status, giving them “national treatment”)；Freer trade: gradually, through negotiation ；Predictability: through binding and transparency ;Promoting fair competition；Encouraging development and economic reformRegional trade agreement：are trade agreements between two or more countries that reduce trade barriers.Preferential Trade Agreement：reduce or abolish tariffs on a limited number of products within two or more countriesFree-Trade Area：the countries agree to eliminate tariffs and other nontariff barriers to trade among each other.Customs Union：is an agreement between countries to maintain a free-trade and to construct and maintain a common external tariff.Common Market：is a custom union with the addition of factor mobility between membercountries.Economic Union：is an agreement between countries to maintain a free-trade area, a common external tariff, the free mobility of capital and labor, and some degree of unification in government fiscal and monetary polices.Trade Effects of Economic Integration：The favorable effect on trade is known as trade creation (TC).；The losses for countries that are not members of the trade agreement are known as trade diversion (TD)；Whether or not a trade agreement between two countries increases world welfare depends on whether trade creation is larger than trade diversionImport substitution strategy：involves using trade barriers to protect domestic industries from import competing. ；high trade barriers maintained by industrial country ；tariffs and quotas Export-led strategy：Focus on export of manufactures as engine of growth.；A flying-Geese pattern of growth；Low tariffs, subsidies , preferred loan ,economy zones, and so onInternational economic policy：refers to activities of national governments that affect the movement of trade and factor inputs among nations.Internal balance：Fully employed economy；Little or no inflationExternal balance：Current account is close enough to balance that foreign debts can be repaid (deficit) or that other nations can repay their debts (surplus)Open economy Policy instruments：Expenditure-changing policies: alter aggregate demand for goods：Expenditure-changing policies: alter aggregate demand for goods ,Fiscal policy (government taxes and spending) . Monetary policy (money supply) ,Monetary policy：If a nation has unemployment with a BOP surplus, or inflation with a BOP deficit, an increase/decrease in the money supply will restore both internal and external balances。