Chapter5TheStandardTradeModel

1、 Chapter 5 The Standard Trade Model (continue) 1一、A Standard Model of a Trading Economy (continue)2 Last time we have learned the biased economic growth, now let us to study relative supply and the terms of trade.3Relative Supply and the Terms of TradeExport-biased（出口偏向） growth(Figure 5-7: a) Suppos

2、e that home experiences growth biased toward cloth and disproportionately expands a countrys PP in the direction of the good it exports, Then for the world as a whole the output of cloth relative to food will rise at any given price and the world relative supply curve will shift to the right from RS

3、1 to RS24Figure 5-7: Growth and Relative SupplyRelative priceof cloth, PC/PFRelative quantityof cloth, QC + Q*C QF + Q*FRS1RD1(PC/PF)1RS2(PC/PF)22(a) Cloth-biased growth5 This shift worsens a growing countrys terms of trade, to the benefit of the rest of the world.6Import-biased growth （进口偏向）(Figure

4、5-7:b) It disproportionately expands a countrys PP in the direction of the good it imports. It improves a growing countrys terms of trade at the rest of the words expense.7Figure 5-7: Growth and Relative SupplyRelative priceof cloth, PC/PFRelative quantityof cloth, QC + Q*C QF + Q*FRS2RD2(PC/PF)2RS1

5、(PC/PF)11(b) Food-biased growth8International Effects of GrowthExport-biased growth in the rest of the world improves our terms of trade, while import-biased growth abroad worsens our terms of trade.9Export-biased growth in our country worsens our terms of trade, reducing the direct benefits of grow

6、th, while import-biased growth leads to an improvement of our terms of trade.10Immiserizing growth （贫困化的经济增长） A situation where export-biased growth by poor nations can worsen their terms of trade so much that they would be worse off than if they had not grown at all. The change in the terms of trad

7、e is large enough to offset the initial favorable effects of an increase in a country productive capacity.11 It can occur under extreme conditions: Strongly export-biased growth must be combined with very steep RS and RD curves. Please draw the Figure and then you can fully understand it.12 It is re

8、garded by most economists as more a theoretical point than a real-world issue.13Table 5-1: Average Annual Percent Changes in Terms of Trade14 Case studyImmiserizing growth and the income In the developing countries. 15 据联合国国际贸易和发展统计手册的有关资料，两类产品价格指数变化如下表。年份 1950年 1960年 1970年 1971年 A 100 100 91 122 B

9、96 144 102 153A :原料和初级产品价格B :工业制成品价格16 60年代，坦桑尼亚用5吨剑麻可以换回一台拖拉机，70年代要用10吨剑麻才能换回同样一台拖拉机。 进入80年代，据联合国最不发达国家会议的材料说：“这10年间，国际市场上工业制成品价格以每年411的速度上升，而原料和初级产品价格却大幅度下跌，如棉花、咖啡、可可和水稻，价格分别下跌3351。”17 世界银行资料编制了一张初级产品(不包括石油)的“商品价格加权指数”图表，以19791981年价格为100，各年指数如下： 1960年115 1970年112 1980年100 1985年 80 1986年 7018In a s

10、tandard model of a trading economy, wediscussed the terms of trade changes from thesupply side of the world economy, now we turn to changes from the demand side of theworld economy. 19二、International Transfers of Income: Shifting the RD CurveInternational transfers of income may affect a countrys te

11、rms of trade by shifting the world relative demand curve. Relative world demand for goods may shift because of: Changes in tastes(cholesterol); Changes in technology(lamps); International transfers of income.20 How international transfers affect the terms of trade?21The transfer of problem If Home m

12、akes a transfer of some of its income to Foreign：When both countries allocate their change in spending in the same proportions (Ohlins point, P95): The RD curve will not shift, and there will be no terms of trade effect.22When the two countries do not allocate their change in spending in the same pr

13、oportions (Keyness point, P95): The RD curve will shift and there will be a terms of trade effect. 23 Which one is correct?24Effects of a transfer on the terms of trade The direction of the effect on terms of trade will depend on the difference in Home and Foreign spending patterns. Suppose that Hom

14、e has a higher marginal propensity to spend on cloth than Foreign.25 Figure 5-8 shows: Homes transfer payment to Foreign reduces demand for cloth and increases demand for food;RD curve shifts to the left, lowers the relative price of cloth;Worsening Homes terms of Trade( because it exports cloth ),

15、while improving Foreigns. 26Figure 5-8: Effects of a Transfer on the Terms of TradeRelative priceof cloth, PC/PFRelative quantityof cloth, QC + Q*C QF + Q*FRSRD2RD1(PC/PF)221(PC/PF)127Presumptions about the Terms of Trade Effects of Transfers A transfer will worsen the donors terms of trade if the d

16、onor has a higher marginal propensity to spend（边际消费倾向） on its export good than the recipient.28 There are some questions about the Presumptions above: If differences in marginal propensities to spend were simply a matter of differences in tastes, there would be no presumption either way: Which good

17、a country exports depends for the most part on differences in technology or resources, which need have nothing to do with tastes. 29 In practice, most countries spend a much higher share of their income on domestically produced goods than foreigners do. This is not necessarily due to differences in

18、taste but rather to barriers to trade, that is natural (nontraded good such as haircuts; transport cost) and artificial (tariff and quotas).30 三、Tariffs（关税）and Export Subsidies （出口补贴） : Simultaneous Shifts in RS and RD In previous sections we considered the relative supply and relative demand with s

19、ome economic factors, now let us deal with simultaneous shift in RS and RD. The price changes caused by tariffs and subsidies change both relative supply and relative demand.31Import tariffs and export subsidies Import tariffs are taxes levied on imports; Export subsidies are payments given to domes

20、tic producers who sell a good abroad. 32 Case studyImport tariffs and export subsidies in China. 33 我国的进口关税 经国务院批准，从2005年1月1日起，我国将进一步降低进口关税，关税总水平将由10.4降低至9.9，涉及降税的共900多个税目。 据了解，2005年农产品平均税率将由15.6降低到15.3；工业品平均税率将由9.5降低到9.0。其中，水产品平均税率为10.5，木材、纸及其制品为4.6，纺织品和服装为11.4，化工产品为6.9，交通工具为13.3，机械产品为8.0，电子产品为9.1

21、，进口汽车为(年月日再降到，年月日降到的目标税率)。 34 35我国的出口补贴 在计划经济下，国家垄断全部外贸，国营外贸公司只要能够完成出口计划，全部亏损由国家财政补贴。1990年为与国际惯例接轨，取消了财政出口补贴。 我国小农业的生产成本较高，许多农产品国内价格已高于国际价格，例如在1995年时，二者之比为：大米166%，玉米138%，小麦116%。到2005年时，我国的小农经济不会有重大改变，届时无出口补贴，农产品如何出口？农民卖粮难，收入下降的局面很可能发生。 2005年4月有关媒体已披露我国玉米出口补贴政策，出口玉米一吨至少能补203元。36 The distinctive featu

22、re of tariffs and export subsidies is that they create a difference between prices at which goods are traded on the world market and their prices within a country.37 The direct effect of a tariff is to make imported goods more expensive inside a country than they are outside. An export subsidy raise

23、s the price of exported goods inside a country than they are outside. 38Import tariffs and export subsidies affect both relative supply and relative demand.Relative demand and supply effects of a tariffTariffs drive a wedge(楔子) between the prices at which goods are traded internationally and the pri

24、ces at which they are traded within a country .39 If home imposes a 20 percent tariff on the value of food imports: The home producers will face a lower relative cloth price and will produce less cloth and more food. The home consumers will shift their consumption toward cloth and away from food. 40

25、 So an import tariff on food imposed by Home both reduces the relative supply of cloth from RS1 to RS2 and increases the relative demand of cloth from RD1 to RD2 in Figure 5-9. As a result, the relative price of cloth must rises from PC/PF1 to PC/PF2, and Homes terms of trade improve at Foreigns exp

26、ense41Figure 5-9: Effects of a Tariff on the Terms of TradeRelative priceof cloth, PC/PFRelative quantityof cloth, QC + Q*C QF + Q*FRS1RD1RD2RS2 (PC/PF)11(PC/PF)2242 The extent of this terms of trade effect depends on how large the country imposing the tariff is relative to the rest of the world. If

27、 the country is only a small part of the world, it cannot have much effect on world relative supply and demand and therefore cannot have much effect on relative prices.43Effects of an Export Subsidy Tariffs and export subsidies are often treated as similar policies but they have opposite effects on

28、the terms of trade. 44 Suppose that Home offers 20% subsidy on the value of cloth exported. This will raise Homes internal price of cloth relative to food by 20% It leads Home producers to produce more cloth and less food; While leading home consumers to substitute food for cloth as illustrated in F

29、igure 5-6.45Figure 5-10: Effects of a Subsidy on the Terms of TradeRelative priceof cloth, PC/PFRelative quantityof cloth, QC + Q*C QF + Q*FRS1RD1RD2RS2(PC/PF)11(PC/PF)2246 Conclusion: A Home export subsidy worsens Homes terms of trade and improves Foreigns.47Implications of Terms of Trade Effects:

30、Who Gains and Who Loses?The International Distribution of Income If Home (a large country) imposes a tariff, its welfare increases as long as the tariff is not too large (in case there is no import), while Foreigns welfare decreases. If Home offers an export subsidy, its welfare deteriorates, while

31、Foreigns welfare increases.48 In the real world of many countries, a foreign government may subsidize the export of a good that competes with U.S. exports; this foreign subsidy will obviously hurt the the U.S. exports. 49 We need to qualify our conclusions from a two-country analysis: Subsidies to exports of things the U.S. imports help us, while tariffs against U.S. exports hurts us. 50 However, a tariff also imposes costs by distorting production and consumption incentives within Homes economy( see chapter 8 )51The Distribution of In