[经济学]Ch2-2defintions and overview of international trade.ppt

Data Source More data could be found in the following website: /english/res_e/reser_e/wtr_e.htm Reasons for Changes in Merchandise Trade Patterns Engel’s Law Price changes Technological developments Multinational enterprises Regional trading blocs 1.2.7 International Prices and Terms of Trade International prices Terms of Trade The terms of trade of a nation are defined as the ratio of the price of its export commodity to the price of its import commodity. The terms of trade of a nation are given by the ratio of the price index of its exports to the price index of its imports. This ratio is usually multiplied by 100 in order to express the terms of trade in percentages. These terms of trade are often referred to as the commodity or net barter terms of trade. The Various Terms of Trade There are several other types of terms of trade, notably, net terms of trade, the income terms of trade, the single factorial terms of trade, and the double factorial terms of trade. Commodity, or net barter, terms of trade (N) N=( Px/Pm ) 100 A nation’s income terms of trade (I) I=( Px/Pm ) Qx Qx is an index of the volume of exports. A nation’s single factorial terms of trade (S) S=( Px/Pm ) Zx Zx is a productivity index in the nation’s export sector. The concept of the single factorial terms of trade can be extended to measure the nation’s double factorial terms of trade (D) D=( Px/Pm) ( Zx/Zm ) 100 Of the four terms of trade defined, N, I, and S are the most important. D does not have much significance for developing nations and is very seldom, if ever, measured. (It was included here only for the sake of completeness.) The most significant terms of trade for developing nations are I and S. However, since N is the easiest to measure, most of the discussion in the economic literature has been in terms of N. Indeed, N is often referred to simply as “the terms of trade.” As we have seen in the above examples, I and S can rise even when N declines. This is generally r