The World Economy Trade and Finance

, by Yarbrough, Beth V.; Yarbrough, Robert M.

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ISBN: 9780324183290 | 0324183291
Cover: Hardcover
Copyright: 9/25/2002

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The connection between international economics and your daily life is greater than you might think. THE WORLD ECONOMY: TRADE AND FINANCE is the most accurate, balanced, and user-friendly textbook available. And, at the end of every chapter you'll see at least three examples of how economic issues are impacting your life as a student and a citizen. Whether you need a great grade in the class or an economics textbook you'll use again and again, make THE WORLD ECONOMY: TRADE AND FINANCE your choice to help you succeed.

Introduction to the World Economy	p. 1
Why Study International Economics?	p. 1
What Do We Mean by International Interdependence?	p. 1
The Economic Significance of Political Boundaries	p. 11
Studying International Economics	p. 12
International Microeconomics
Comparative Advantage I: Labor Productivity and the Ricardian Model	p. 18
Introduction	p. 18
Early Thinking about Trade: The Mercantilists	p. 19
The Decline of Mercantilism (and the Birth of Economics)	p. 19
Keeping Things Simple: Some Assumptions	p. 20
The Ricardian World without Trade	p. 20
The Ricardian World with Trade	p. 25
The Gains from Trade: Exchange and Specialization	p. 33
Using Demand and Supply to Analyze Trade	p. 34
Can the Ricardian Model Really Explain Trade?	p. 38
Does Labor Productivity Really Vary?	p. 39
Turning Back Trade Turns Back the Clock	p. 41
What Can the World Produce? The World Production Possibilities Frontier	p. 45
Comparative Advantage II: Factor Endowments and the Neoclassical Model	p. 47
Introduction	p. 47
The Neoclassical World without Trade	p. 47
The Neoclassical World with Trade	p. 54
Sources of Comparative Advantage	p. 57
Do Autarky and Trade Matter? The Two Koreas	p. 61
From Fish to Information Technology	p. 63
Socks: Made in USA	p. 63
Can Heckscher-Ohlin Explain China's Trade?	p. 64
The Edgeworth Box	p. 69
Offer Curves	p. 73
Trade, Distribution, and Welfare	p. 76
Introduction	p. 76
Partial- and General-Equilibrium Analysis	p. 76
How Do Output Prices Affect Factor Prices? The Stolper-Samuelson Theorem	p. 77
How Do Factor Prices Vary across Countries? The Factor Price Equalization Theorem	p. 80
What If Factors Are Immobile in the Short Run? The Specific-Factors Model	p. 84
Trade and Welfare: Gainers, Losers, and Compensation	p. 90
Trade and Wages I: Asia	p. 94
Trade and Wages II: The United States	p. 95
Deja Vu: Learning from Economic History	p. 96
Adjusting to NAFTA	p. 97
The State of Exports	p. 98
Beyond Comparative Advantage: Empirical Evidence and New Trade Theories	p. 103
Introduction	p. 103
Questions to Be Answered	p. 103
How Do We Know If a Theory about Trade Is Correct?	p. 104
Testing the Heckscher-Ohlin Model	p. 104
Intra-Industry Trade	p. 107
Trade with Economies of Scale	p. 110
Technology-Based Theories of Trade: The Product Cycle	p. 118
Overlapping Demands as a Basis for Trade	p. 119
Transportation Costs as a Determinant of Trade	p. 121
Location of Industry	p. 123
Conducting Semiconductor Trade	p. 124
"Getting the Joke" as a Source of Comparative Advantage	p. 126
Around the World in 22 Days	p. 127
Internal Economies of Scale and the Sperm Trade	p. 129
Multinationals and Intra-Firm Trade	p. 129
Tariffs	p. 134
Introduction	p. 134
Why Would a Country Impose a Tariff?	p. 134
Types of Tariffs and Ways to Measure Them	p. 135
What Happens When a Small Country Imposes an Import Tariff?	p. 137
What Happens When a Large Country Imposes an Import Tariff?	p. 142
How Does a Tariff Affect Factor Prices? Specific Factors and Stolper-Samuelson	p. 146
Tariffs and Economies of Scale	p. 146
The Effective Rate of Protection	p. 146
Off-Shore Assembly Provisions	p. 148
Taxing Exports	p. 149
Making Cheap Medicine Expensive	p. 152
Retaliatory Tariffs	p. 152
China, Tariffs, and the WTO	p. 153
Is It a "Tax" or a "Fee"?	p. 155
Offer Curves and Tariffs	p. 159
General-Equilibrium Tariff Effects in a Small Country	p. 163
Nontariff Barriers and the New Protectionism	p. 165
Introduction	p. 165
Quotas	p. 165
Voluntary Export Restraints	p. 167
Comparison of Tariffs and Quotas	p. 168
Export Subsidies and Countervailing Duties	p. 171
Dumping	p. 176
Voluntary Import Expansions	p. 181
Administrative and Technical Standards	p. 182
How Can We Measure Nontariff Barriers?	p. 185
Has Trade Policy Gone Bananas?	p. 186
Designer Grayjeans	p. 188
Export Quotas	p. 188
Arguments for Restricting Trade	p. 193
Introduction	p. 193
Categories of Arguments for Trade Restrictions	p. 193
What about "Infant" Industries?	p. 194
What If Markets Aren't Competitive?	p. 197
What If There Are Externalities?	p. 205
Shouldn't the "Playing Field" Be Level?	p. 211
How Can We Compete with Low-Wage Countries?	p. 211
How Do We Handle National Security and Defense?	p. 212
Aren't Goods and Money Better Than Just Goods?	p. 213
Can We Threaten Other Countries into Trade Liberalization?	p. 213
Games at 35,000 Feet	p. 215
No, The Other Type of Dumping	p. 218
Spawning a Trade Dispute	p. 218
MITI Miracles?	p. 219
Science, or Politics?	p. 220
The Political Economy of Trade Policy and Borders	p. 225
Introduction	p. 225
The Political Economy of National Trade Policy	p. 226
How Did We Get Here? A Brief History of International Trade Policy	p. 227
Economic Integration and Regional Trading	p. 235
Interregional Trade	p. 246
NAFTA Traffic Jams	p. 249
I.D. Cards for Avocados	p. 250
Life before NAFTA	p. 250
Growth, Immigration, and Multinationals	p. 256
Introduction	p. 256
Economic Growth I: More Inputs	p. 258
Economic Growth II: More Productivity	p. 264
What If Factors Can Move?	p. 268
Growth Myths and Miracles	p. 288
Evading Tax Evasion	p. 289
Saving, Investment, and Intertemporal Trade	p. 290
Send Money	p. 292
Development, Transition, and Trade	p. 297
Introduction	p. 297
Defining Development	p. 298
Development Issues	p. 301
Agriculture, Industry, or Both?	p. 302
North-South Issues	p. 307
Developing Markets: Economies in Transition	p. 320
Does Aid Aid Growth?	p. 326
Location, Location, Location, and TADAZ	p. 327
Open to Development	p. 327
Reproducing Pharmaceuticals	p. 328
Oil Junkies?	p. 329
International Macroeconomics
Currency Markets and Exchange Rates	p. 336
Introduction	p. 336
Exchange Rates and Prices	p. 336
Foreign Exchange Markets	p. 338
Interest Parity	p. 344
Demand and Supply in the Foreign Exchange Market	p. 350
How Are Exchange Rates Determined under a Flexible-Rate Regime?	p. 352
How Are Exchange Rates Determined under a Fixed-Rate Regime?	p. 354
The Effective Exchange Rate	p. 357
Offshore Currency Markets	p. 358
Multinationals and Foreign Exchange	p. 359
Picking Stocks Means Picking Currencies	p. 362
Herstatt Risk	p. 363
Currency Online	p. 363
The Balance-of-Payments Accounts	p. 367
Introduction	p. 367
What's in the Balance-of-Payments Accounts?	p. 368
What Are Balance-of-Payments Surpluses and Deficits?	p. 379
What's the Connection? The Balance of Payments and the Foreign Exchange Market	p. 380
The U.S.-China Trade Deficit: $10 Billion or $40 Billion?	p. 388
The United States as a Debtor	p. 388
Rest of Galaxy Enjoys Current-Account Surplus	p. 390
The Market for Goods and Services in an Open Economy	p. 395
Introduction	p. 395
How Do We Measure a Country's Output?	p. 395
What Determines Output and Income in an Open Economy?	p. 397
How Does International Trade Affect the Market for Goods and Services?	p. 402
What Causes Changes in the Market for Goods and Services?	p. 405
Interdependence: Protectionism, Income, and the Current Account	p. 410
The "Twin Deficits"	p. 411
A Concise Graphical Summary: The IS Curve	p. 413
GDP: What's in There?	p. 415
The Peso and Mexico-U.S. Trade	p. 417
The Macroeconomics of German Unification	p. 419
Money, the Banking System, and Foreign Exchange	p. 422
Introduction	p. 422
Money	p. 422
Banking Crises	p. 435
Foreign Exchange	p. 446
Bringing It All Together	p. 452
How a Flexible Exchange Rate Regime Works	p. 453
How a Fixed Exchange Rate Regime Works	p. 455
Best of Both Worlds	p. 460
Where the Foreign Exchange Reserves Are	p. 461
Birth of a Currency	p. 461
Short-Run Macroeconomic Policy under Fixed Exchange Rates	p. 465
Introduction	p. 465
Macroeconomic Goals in an Open Economy	p. 467
Macroeconomic Policy with Immobile Capital	p. 469
Macroeconomic Policy with Perfectly Mobile Capital	p. 475
Macroeconomic Policy with Imperfectly Mobile Capital	p. 484
A Special Case: The Reserve Country	p. 487
More on German Unification	p. 489
Betting against the Baht	p. 491
Pesos and Tequila	p. 492
The Two Faces of Capital Flows	p. 493
Paying the Bills	p. 495
Pegged, but to What?	p. 496
Short-Run Macroeconomic Policy under Flexible Exchange Rates	p. 501
Introduction	p. 501
Macroeconomic Policy with Immobile Capital	p. 503
Macroeconomic Policy with Perfectly Mobile Capital	p. 506
Macroeconomic Policy with Imperfectly Mobile Capital	p. 511
The Policy Mix	p. 514
Summary of Short-Run Policy Effectiveness under a Flexible Exchange Rate	p. 518
The Japan Slump	p. 518
Policy Squeezes: To Do, or Not to Do?	p. 521
Floating the Pound, Part I	p. 522
The Budget and the Dollar	p. 524
The Exchange Rate in Long-Run Equilibrium	p. 529
Introduction	p. 529
Money in Long-Run Equilibrium	p. 529
Purchasing Power Parity	p. 533
The Monetary Approach to the Exchange Rate	p. 540
The Real Exchange Rate	p. 547
Long-Run Equilibrium Exchange Rates	p. 549
More on Why Interest Rates Differ	p. 550
Choose Your GNP	p. 552
Purchasing Power Parity at Home?	p. 554
Nontraded Goods and the Real Exchange Rate	p. 554
Dry Cleaning in Tokyo and Mumbai	p. 555
Prices and Output in an Open Economy	p. 560
Introduction	p. 560
Apples versus GDP: Supply in Micro- and Macroeconomics	p. 561
Aggregate Demand under Fixed Exchange Rates	p. 563
Long-Run Aggregate Supply	p. 566
Medium-Run Aggregate Supply	p. 568
Combining Aggregate Demand and Aggregate Supply	p. 570
Macroeconomic Policy under Fixed Exchange Rates	p. 572
Aggregate Demand under Flexible Exchange Rates	p. 577
Macroeconomic Policies under Flexible Exchange Rates	p. 578
Supply Shocks	p. 581
Unemployment--Structural and Cyclical	p. 584
Government Budgets--Structural and Cyclical	p. 586
Greasing the World Economy	p. 586
The Aggregate Demand Curve	p. 594
International Monetary Regimes	p. 597
Introduction	p. 597
What Does a Monetary Regime Need to Do?	p. 597
The Gold Standard, 1880-1913: Panacea or Rose-Colored Glasses?	p. 599
The Interwar Years, 1919-1939: Search for an International Monetary System	p. 602
Bretton Woods, 1945-1971: A Negotiated International Monetary System	p. 604
Post-Bretton Woods, 1973-: Another Search for an International Monetary System	p. 610
The Fixed-versus-Flexible Debate	p. 617
Money in the European Union: From EMS to EMU	p. 622
Floating the Pound, Part II	p. 628
Do Floating Rates Really Float?	p. 629
When Is a Central Bank Not a Central Bank?	p. 630
Standing Ireland in the Corner	p. 631
Su Currency Es Mi Currency	p. 631
Macroeconomics of Development and Transition	p. 636
Introduction	p. 636
Development and the Macroeconomy	p. 637
Transition and the Macroeconomy	p. 645
The HIPC Initiative	p. 659
Ownership Matters	p. 660
Credits	p. 667
Author Index	p. 669
Country or Economy Index	p. 671
Subject Index	p. 674
Table of Contents provided by Syndetics. All Rights Reserved.

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