《internation trade》.doc

Contents Contents 1 CHAPTER 1 Introduction 4 1-1 Brief Outline 4 1-2 The International Economy 5 1-3 What is International Economics? 9 1-4 Some Trade Terminology 9 CHAPTER 2 A Pure Exchange Model of Trade 11 2-0 Reasons for Trade 11 2-1 A Pure Exchange Economy 12 2-2 Determinants of the Terms of Trade 13 2-3 Example of a Trade Pattern 15 2-4 Three Traders in a Pure Exchange Economy 16 2-5 Three Traders with International Trade 18 CHAPTER 3 The Ricardian Model of Comparative Advantage 20 3-0The Theory of Comparative Advantage - Overview 20 3-1 Ricardian Model Highlights 23 3-2 Ricardian Model Assumptions 23 3-3 The Ricardian Model PPF 27 3-4 Definitions: Absolute and Comparative Advantage 29 3-5 A Ricardian Numerical Example 33 3-6 Relationship Between Prices and Wages 37 3-7 Deriving the Autarky Terms of Trade 38 3-8 The Motivation for International Trade 39 3-9 Welfare Effects of Free Trade 41 3-9A Real Wage Effects of Free Trade 41 3-9B Aggregate Welfare Effects of Free Trade 46 3-10 Production and Consumption Efficiency Gains from Free Trade 48 CHAPTER 4 The Heckscher-Ohlin (Factor Proportions) Model 49 4-0 The Heckscher-Ohlin (Factor Proportions) Model Overview 49 4-1 Heckscher-Ohlin Model Assumptions 50 4-2 The Production Possibility Frontier (Fixed Proportions Case) 55 4-3 The Rybczynski Theorem 57 The Relationship between Endowments and Outputs. 57 4-4 The Magnification Effect for Quantities 58 4-5 The Stolper-Samuelson Theorem 61 4-6 The Magnification Effect for Prices 64 4-7 The Production Possibility Frontier (Variable Proportions Case) 67 4-8 The Heckscher-Ohlin Theorem 68 4-9 Depicting a Free Trade Equilibrium in the H-O Model 71 4-10 National Welfare Effects of Free Trade in the H-O Model 72 4-11 Production and Consumption Efficiency Gains from Free Trade 73 4-12 The Distributive Effects of Free Trade in the H-O Model 74 4-13 The Compensation Principle 76 4-14 Factor-Price Equalization 79 CHAPTER 5 Immobile Factor Model 80 5-0 The Immobile Factor Mod