国际贸易双语教案问题答案

Chapter7

GrowthandTrade

ObjectivesoftheChapter

Inthischapter,theHeckscherOhlinmodelofinternationaltradeisextendedtoincludegrowthintheendowmentofacountry’sfactorsofproductionandtechnologicalimprovements.Theimpactofeconomicgrowthoninternationaltradewilldependonwhetherthegrowthisbalancedinallgoodsorisbiasedtowardonegood,andonwhetherthecountryexperiencinggrowthislargeorsmall.

Aninterestingresultemergesfromtheinteractionofgrowthandinternationaltrade:growthinone’sowncountrymaynotbeanunmitigatedblessing.First,astheRybczynskitheoremshows,growthinonesectorcancauseproductioninnon-growingsectorstodecline.Second,undercertainconditions,export-biasedgrowthmayleadtoanadversetermsoftradeeffect,andnationalwell-beingmayactuallydecline.

AfterreadingChapter7youshouldbeableto

showhowtradepatternsareinfluencedbythesourceofeconomicgrowth.

showhoweconomicgrowthcanchangetheproductionpatternsofacountry.

discusshowgrowthaffectsthetermsoftradeandthewell-beingofthecountryexperiencingit.

relatetherateofgrowthinacountrytoitsopennesstointernationaltrade.

ImportantConcepts

Dutchdisease: AfamousexampleofthephenomenondescribedbytheRybczynskitheorem.ThetermwasusedtodescribeaproblemexperiencedbytheNetherlands,inwhichthediscoveryofnewnaturalgasfieldswasthoughttohaveledtoadeclineintheproductionofmanufacturedgoods.

Immiserizinggrowth: Inalargetradingcountrywhichisheavilydependentontrade,growthintheexportsectormayleadtoadeteriorationinitstermsoftradelargeenoughtoreducethecountry’swelfare.

Productcyclehypothesis: Predictsthatasthetechnologyofaproductbecomesmorestandardizedandstatic,productionshiftsfromhigh-skilledlaborcountriestocountriesabundantinlow-cost,low-skilledlabor.

Rybczynskitheorem: Inatwo-productworldwithconstantprices,thegrowthofonefactorofproductionresultsinadecreaseintheoutputoftheproductthatdoesnotusethisfactorintensively.

Small/largecountryassumption: Asmallcountryhasnoimpactoninternationalcommodityprices;alargecountrycanhaveanimpactoninternationalprices.

WarmupQuestions

TrueorFalse?Explain.

1. T/F Acountrywhichis“large”mayimproveitstermsoftradebyinvestinginthegrowthoftheimportcompetingsectorratherthanintheexportsector.

2. T/F Growthinasmallcountry,bydefinition,willleavethetermsoftradeunchanged.

3. T/F Adolescenceisanexampleof“immiserizinggrowth.”

4. T/F Growthinacountry’sfactorsofproductionalwaysmakesthecountrymoreself-sufficientandlessreliantoninternationaltrade.

5. T/F Acountrythatisolatesitselffromtherestoftheworldmaydoomitscitizenstoalowerstandardofliving.

MultipleChoice

1. “Rapidaccumulationofnewcapitalinafastgrowingtradingcountrycanmakethecountryimportmorenaturalresources.”Thisstatementisimpliedbythe

A. HeckscherOhlintheorem.

B. StolperSamuelsontheorem.

C. Rybczynskitheorem.

D. factorpriceequalizationtheorem.

2. Accordingtotradetheory,ifanationhasacomparativeadvantageinacapital-intensivelyproducedgood,andtherateofgrowthofcapitalisgreaterthantherateofgrowthofotherinputs(e.g.,labor),thepatternofgrowthwhichresultswillbe

A. importreplacing.

B. neutralasbetweencapitalintensiveandotherproducts.

C. exportexpanding.

D. noneoftheabove.

3. Anecessaryconditionforimmiserizinggrowthisthatthe

A. country’sgrowthisbiasedtowardtheexportsector.

B. foreigndemandforthecountry’sexportispriceelastic.

C. country’sconsumptionpreferencesareheavilybiasedinfavoroftheexportgood.

D. leveloftradeisnotasignificantpartofthecountry’seconomy.

4. TheHeckscherOhlintheorysuccessfullyexplainsthe

A. productinnovationprocessandthelocationofindustriesincountriesotherthantheUnitedStates.

B. risingimportanceofacountrybothexportingandimportingthesameproduct.

C. risingtradebetweentheUnitedStatesandCanadabecausebotharesimilarinfactorendowments.

D. tradepatternsbetweenindustrializedcountriesandthedevelopingcountries,whichdifferinfactorendowments.

5. Whichofthefollowingismostlikelytoundergoaproductcycle?

A. Rice.

B. Televisionsets.

C. Crudeoil.

D. Minerals.

Problems

1. BacktoourcountriesofLeinsterandSaxony.PPCsforeachofthecountriesaredrawnonthefollowinggraphwiththefreetradepriceof0.25telephones/loafindicated.(Fromthisquestionforward,youshouldconsiderLeinstera“largecountry”andSaxonya“smallcountry.”)

Leinster

Saxony

Price=

0.25telephones

perloaf

Price=

0.25telephones

perloaf

Bread

Bread

IO

IO

Telephones

Telephones

Figure7.1

SupposethatSaxonydiscoversawayofirrigatingpreviouslyaridland.

a. WhatwouldyouexpecttohappentothevolumeoftradebetweenLeinsterandSaxony?

b. WhatwouldhappentothelevelofeconomicwellbeinginSaxonyasaresultofthegrowthitexperiencedaftertheexpansionofirrigation?

Suppose,instead,thataplaguewipesout20percentofLeinster’slaborforce.

c. WhatwouldyouexpecttohappentothevolumeoftradebetweenLeinsterandSaxony?

d. WhatwouldhappentothelevelofeconomicwellbeinginLeinsterafterthepopulationdecline?

2. AssumethatCanadaexportslandintensivewheatandimportscloththatusesunskilledlaborintensively,eventhoughCanadadoesmakesomeclothathome.IfamajorbreakthroughinbiotechnologydoublesCanada’sabilitytogrowwheat,andiftheextrawheatsupplylowerstheworldpriceofwheat(inyardsofclothperbushelofwheat),

a. willthissetofeventsmakeCanadabetterofforworseoffasanation?

b. willthissetofeventsmaketherestoftheworldbetterofforworseoff?

c. willtheseeventsraiseorlowertherealwagerateofunskilledCanadianlaborers?

If,instead,therestoftheworld’slaborsupplydoubleswhileitslandsupplyremainsthesame,

d. willthiseventanditseffectsmakeCanadabetterofforworseoffasanation?

3. ThetradeministerforSaxonyisanationalist,amercantilist,anisolationist,andnearlyeveryotherkindof“ist”youcanthinkof.ShehassuggestedthatSaxonycloseitsdoorstotelephoneimportsfromLeinster.Focusingontheroleoftechnologyineconomicgrowth,trytotalkheroutofherantiimportstance.

4. SupposeKazakhstanislandandunskilledlaborabundantandcapitalandskilledlaborscarce.

a. AccordingtotheHeckscherOhlinmodel,whattypeofgoodswillKazakhstanexport,andwhattypewillitimport?

b. SupposethatKazakhstanwantstoachieve“importreplacing”growth.Whatchangeinitsendowmentswouldachievethisgrowth?IfKazakhstanwerelarge,whatwouldbetheeffectonitstermsoftrade?

5. SomeoilexecutivesareurgingCongresstoopenupthewildlifepreservesintheArcticregionofAlaskatooilexploration.If,indeed,hugenewoilreservesarediscoveredthere,

a. whatisli