国际经济学第五章

Chapter5TheStandardTradeModel2023/1/151ChapterOrganizationIntroductionAStandardModelofaTradingEconomyInternationalTransfersofIncome:ShiftingtheRDCurveTariffsandExportSubsidies:SimultaneousShiftsinRSandRDSummaryAppendix:RepresentingInternationalEquilibriumwithOfferCurves2023/1/152IntroductionPrevioustradetheorieshaveemphasizedspecificsourcesofcomparativeadvantagewhichgiverisetointernationaltrade:Differencesinlaborproductivity(Ricardianmodel)Differencesinresources(specificfactorsmodelandHeckscher-Ohlinmodel)2023/1/153Thosemodelssharesnumberoffeatures:TheproductivecapacityofaneconomycanbesummarizedbyitsproductionpossibilityfrontierProductionpossibilitiesdetermineacountry’srelativesupplyscheduleWorldequilibriumisdeterminedbyworldrelativedemandandaworldrelativesupplyschedulethatliesbetweenthenationalrelativesupplyschedules.Thestandardtrademodelisageneralmodeloftradethatadmitsthesemodelsasspecialcases.2023/1/154AStandardModelofa

TradingEconomyThestandardtrademodelisbuiltonfourkeyrelationships:ProductionpossibilityfrontierandtherelativesupplycurveRelativepricesandrelativedemandWorldrelativesupplyandworldrelativedemandTermsoftradeandnationalwelfare2023/1/155AStandardModelofa

TradingEconomyProductionPossibilitiesandRelativeSupplyAssumptionsofthemodel:Eachcountryproducestwogoods,food(F)andcloth(C)Eachcountry’sproductionpossibilityfrontierisasmoothcurve(TT)Thepointonitsproductionpossibilityfrontieratwhichaneconomyactuallyproducesdependsonthepriceofclothrelativetofood,PC/PF.IsovaluelinesLinesalongwhichthemarketvalueofoutputisconstant2023/1/156Figure5-1:RelativePricesDeterminetheEconomy’sOutputQIsovaluelinesTTAStandardModelofa

TradingEconomy

Clothproduction,QCFoodproduction,QF2023/1/157Figure5-2:HowanIncreaseintheRelativePriceofClothAffects RelativeSupplyQ1VV1(PC/PF)1Q2VV2(PC/PF)2AStandardModelofa

TradingEconomyTT

Clothproduction,QCFoodproduction,QF2023/1/158RelativePricesandDemandThevalueofaneconomy'sconsumptionequalsthevalueofitsproduction:PCQC

+PFQF=PCDC+PFDF=VTheeconomy’schoiceofapointontheisovaluelinedependsonthetastesofitsconsumers,whichcanberepresentedgraphicallybyaseriesofindifferencecurves.AStandardModelofa

TradingEconomy2023/1/159IndifferencecurvesEachtracesasetofcombinationsofcloth(C)andfood(F)consumptionthatleavetheindividualequallywelloffTheyhavethreeproperties:DownwardslopingThefartherupandtotherighteachlies,thehigherthelevelofwelfaretowhichitcorrespondsEachgetsflatteraswemovetotherightAStandardModelofa

TradingEconomy2023/1/1510TTFigure5-3:Production,Consumption,andTradeintheStandardModel

Clothproduction,QCFoodproduction,QFQDIndifferencecurvesFoodimportsClothexportsAStandardModelofa

TradingEconomy2023/1/1511Iftherelativepriceofcloth,PC/PF,increases,theeconomy’sconsumptionchoiceshiftsfromD1toD2.ThemovefromD1toD2reflectstwoeffects:IncomeeffectSubstitutioneffectItispossiblethattheincomeeffectwillbesostrongthatwhenPC/PFrises,consumptionofbothgoodsactuallyrises,whiletheratioofclothconsumptiontofoodconsumptionfalls.AStandardModelofa

TradingEconomy2023/1/1512TTFigure5-4:EffectsofaRiseintheRelativePriceofClothQ1VV1(PC/PF)1Q2VV2(PC/PF)2D2D1AStandardModelofa

TradingEconomy

Clothproduction,QCFoodproduction,QF2023/1/1513TheWelfareEffectofChangesintheTermsofTradeTermsoftrade

Thepriceofthegoodacountryinitiallyexportsdividedbythepriceofthegooditinitiallyimports.Ariseinthetermsoftradeincreasesacountry’swelfare,whileadeclineinthetermsoftradereducesitswelfare.AStandardModelofa

TradingEconomy2023/1/1514DeterminingRelativePricesSupposethattheworldeconomyconsistsoftwocountries:Home(whichexportscloth)ItstermsoftradearemeasuredbyPC/PFIts

quantitiesofclothandfoodproduced

areQC

andQFForeign(whichexportsfood)ItstermsoftradearemeasuredbyPF/PCIts

quantitiesofclothandfoodproduced

areQ*C

andQ*FAStandardModelofa

TradingEconomy2023/1/1515TodeterminePC/PF,onemustfindtheintersectionofworldrelativesupplyofclothandworldrelativedemand.Theworldrelativesupplycurve(RS)isupwardslopingbecauseanincreaseinPC/PF

leadsbothcountriestoproducemoreclothandlessfood.Theworldrelativedemandcurve(RD)isdownwardslopingbecauseanincreaseinPC/PF

leadsbothcountriestoshifttheirconsumptionmixawayfromclothtowardfood.AStandardModelofa

TradingEconomy2023/1/1516Figure5-5:WorldRelativeSupplyandDemandRSRDRelativepriceofcloth,PC/PFRelativequantityofcloth,QC+Q*C

QF+Q*FAStandardModelofa

TradingEconomy(PC/PF)112023/1/1517EconomicGrowth:AShiftoftheRSCurveIseconomicgrowthinothercountriesgoodorbadforournation?Itmaybegoodforournationbecauseitmeanslargermarketsforourexports.Itmaymeanincreasedcompetitionforourexporters.Isgrowthinacountrymoreorlessvaluablewhenthatnationispartofacloselyintegratedworldeconomy?Itshouldbemorevaluablewhenacountrycansellsomeofitsincreasedproductiontotheworldmarket.Itislessvaluablewhenthebenefitsofgrowtharepassedontoforeignersratherthanretainedathome.AStandardModelofa

TradingEconomy2023/1/1518GrowthandtheProductionPossibilityFrontierEconomicgrowthimpliesanoutwardshiftofacountry’sproductionpossibilityfrontier(TT).BiasedgrowthTakesplace

whenTTshiftsoutmoreinonedirectionthanintheotherCanoccurfortworeasons:TechnologicalprogressinonesectoroftheeconomyIncreaseinacountry’ssupplyofafactorofproductionAStandardModelofa

TradingEconomy2023/1/1519Figure5-6:BiasedGrowthTT1TT1TT2TT2AStandardModelofa

TradingEconomyClothproduction,QCFoodproduction,QF(a)GrowthbiasedtowardclothClothproduction,QCFoodproduction,QF(b)Growthbiasedtowardfood2023/1/1520RelativeSupplyandtheTermsofTradeExport-biasedgrowthDisproportionatelyexpandsacountry’sproductionpossibilitiesinthedirectionofthegooditexportsWorsensagrowingcountry’stermsoftrade,tothebenefitoftherestoftheworldImport-biasedgrowthDisproportionatelyexpandsacountry’sproductionpossibilitiesinthedirectionofthegooditimportsImprovesagrowingcountry’stermsoftradeattherestoftheword’sexpenseAStandardModelofa

TradingEconomy2023/1/1521Figure5-7:GrowthandRelativeSupplyRelativepriceofcloth,PC/PFRelativequantityofcloth,QC+Q*C

QF+Q*FRS1RD1(PC/PF)1RS2(PC/PF)22Relativepriceofcloth,PC/PFRelativequantityofcloth,QC+Q*C

QF+Q*FRS2RD2(PC/PF)2RS1(PC/PF)11(a)Cloth-biasedgrowth(b)Food-biasedgrowthAStandardModelofa

TradingEconomy2023/1/1522InternationalEffectsofGrowthExport-biasedgrowthintherestoftheworldimprovesourtermsoftrade,whileimport-biasedgrowthabroadworsensourtermsoftrade.Export-biasedgrowthinourcountryworsensourtermsoftrade,reducingthedirectbenefitsofgrowth,whileimport-biasedgrowthleadstoanimprovementofourtermsoftrade.AStandardModelofa

TradingEconomy2023/1/1523ImmiserizinggrowthAsituationwhereexport-biasedgrowthbypoornationscanworsentheirtermsoftradesomuchthattheywouldbeworseoffthaniftheyhadnotgrownatallItcanoccurunderextremeconditions:Stronglyexport-biasedgrowthmustbecombinedwithverysteepRSandRDcurves.Itisregardedbymosteconomistsasmoreatheoreticalpointthanareal-worldissue.AStandardModelofa

TradingEconomy2023/1/1524Table5-1:AverageAnnualPercentChangesinTermsofTradeAStandardModelofa

TradingEconomy2023/1/1525InternationalTransfersofIncome:ShiftingtheRDCurveInternationaltransfersofincome,suchaswarreparationsandforeignaid,mayaffectacountry’stermsoftradebyshiftingtheworldrelativedemandcurve.Relativeworlddemandforgoodsmayshiftbecauseof:ChangesintastesChangesintechnologyInternationaltransfersofincomeTheTransferProblemHowinternationaltransfersaffectthetermsoftrade2023/1/1526EffectsofaTransferontheTermsofTradeWhenbothcountriesallocatetheirchangeinspendinginthesameproportions(Ohlin’spoint):TheRDcurvewillnotshift,andtherewillbenotermsoftradeeffect.Whenthetwocountriesdonotallocatetheirchangeinspendinginthesameproportions(Keynes’spoint):TheRDcurvewillshiftandtherewillbeatermsoftradeeffect.ThedirectionoftheeffectontermsoftradewilldependonthedifferenceinHomeandForeignspendingpatterns.InternationalTransfersofIncome:ShiftingtheRDCurve2023/1/1527Figure5-8:EffectsofaTransferontheTermsofTradeRelativepriceofcloth,PC/PFRelativequantityofcloth,QC+Q*C

QF+Q*FRSRD2RD1(PC/PF)221(PC/PF)1InternationalTransfersofIncome:ShiftingtheRDCurve2023/1/1528PresumptionsabouttheTermsofTradeEffectsofTransfersAtransferwillworsenthedonor’stermsoftradeifthedonorhasahighermarginalpropensitytospendonitsexportgoodthantherecipient.Inpractice,mostcountriesspendamuchhighershareoftheirincomeondomesticallyproducedgoodsthanforeignersdo.Thisisnotnecessarilyduetodifferencesintastebutrathertobarrierstotrade,naturalandartificial.InternationalTransfersofIncome:ShiftingtheRDCurve2023/1/1529Importtariffsandexportsubsidiesaffectbothrelativesupplyandrelativedemand.RelativeDemandandSupplyEffectsofaTariffTariffsdriveawedgebetweenthepricesatwhichgoodsaretradedinternationally(externalprices)

and

thepricesatwhichtheyaretradedwithinacountry(internalprices).Thetermsoftradecorrespondtoexternal,notinternal,prices.TariffsandExportSubsidies:SimultaneousShiftsinRSandRD2023/1/1530TariffsandExportSubsidies:SimultaneousShiftsinRSandRDFigure5-9:EffectsofaTariffontheTermsofTradeRelativepriceofcloth,PC/PFRelativequantityofcloth,QC+Q*C

QF+Q*FRS1RD1RD2RS2

(PC/PF)11(PC/PF)222023/1/1531EffectsofanExportSubsidyTariffsandexportsubsidiesareoftentreatedassimilarpoliciesbuttheyhaveoppositeeffectsonthetermsoftrade.Example:SupposethatHomeoffers20%subsidyonthevalueofclothexported:ThiswillraiseHome’sinternalpriceofclothrelativetofoodby20%.ThiswillleadHomeproducerstoproducemoreclothandlessfood.AHomeexportsubsidyworsensHome’stermsoftradeandimprovesForeign’s.TariffsandExportSubsidies:SimultaneousShiftsinRSandRD2023/1/1532TariffsandExportSubsidies:SimultaneousShiftsinRSandRDFigure5-10:EffectsofaSubsidyontheTermsofTradeRelativepriceofcloth,PC/PFRelativequantityofcloth,QC+Q*C

QF+Q*FRS1RD1RD2RS2(PC/PF)11(PC/PF)222023/1/1533ImplicationsofTermsofTradeEffects:WhoGainsandWhoLoses?TheInternationalDistributionofIncomeIfHome(alargecountry)imposesatariff,itswelfareincreasesaslongasthetariffisnottoolarge,whileForeign’swelfaredecreases.IfHomeoffersanexportsubsidy,itswelfaredeteriorates,whileForeign’swelfareincreases.TheDistributionofIncomeWithinCountriesAtariff(subsidy)hasthedirecteffectofraisingtheinternalrelativepriceoftheimported(exported)good.Tariffsandexportsubsidiesmighthaveperverseeffectsoninternalprices(Metzlerparadox).TariffsandExportSubsidies:SimultaneousShiftsinRSandRD2023/1/1534SummaryThestandardtrademodelprovidesaframeworkthatcanbeusedtoaddressawiderangeofinternationalissuesandadmitsprevioustrademodelsasspecialcases.Acountry’stermsoftradearedeterminedbytheintersectionoftheworldrelativesupplyanddemandcurves.Economicgrowthisusuallybiased.Growththatisexport-biased(imp