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《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
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