Questions tagged [international-economics]

Use for questions related to international trade, commercial policy, open economy macroeconomics, international finance, and exchange rates. It can also be used in financial and monetary policies, economic development, migration and factor movements, as long as they are specifically related to an international context. Preferably use in conjunction with other, more precise tag.

Filter by
Sorted by
Tagged with
1 vote
0 answers
15 views

Seeking Insights for MSc Dissertation on EU's CBAM Impact on India: Challenges and Opportunities for Collaboration

Hello Economics Community, I'm currently in the process of designing my MSc Economics dissertation and would greatly appreciate your insights. My focus is on the European Union's Carbon Border ...
Zubiya Moin's user avatar
1 vote
0 answers
20 views

Balance of Payment vs. FX rate

How can a country with a Current Account deficit can have an exchange rate appreciating and viceversa a Current Account surplus and a currency depreciating?
FinanceStudent's user avatar
0 votes
1 answer
34 views

Import proportionality assumption in input-output tables

I'm struggling to get the meaning of the assumption underlying the construction of the input-output tables, that is, the proportionality assumption. I read: When materials offshoring is measured by ...
Maximilian's user avatar
0 votes
1 answer
45 views

Economies of Scale, texbook example

I am currently studying international economics and I'm going over economies of scale, I get the concept, but there is an example in my textbook that I don't understand. Here is a screenshot for ...
KEll's user avatar
  • 1
0 votes
1 answer
40 views

Logic behind uncovered interest rate parity?

So I am having trouble understanding the UIP equilibrium condition. Namely, according to UIP, when the home country has a higher interest rate than the foreign country, its currency will depreciate ...
Nixy 124's user avatar
0 votes
0 answers
34 views

Where can I find the cost of commodities in different markets?

Where can I find a database that tracks current and historic prices of different products and services in regions around the world? I'm very sure that some organizations track the cost of common ...
Michael Altfield's user avatar
0 votes
2 answers
71 views

Surplus in the Financial Account - BoP

As a student I am trying to understand the BoP dynamics resulting from a net inflow in the financial account (FA) of a country. Assuming a country has a Current Account (CA) deficit of -50. CASE1: if ...
Finance_student's user avatar
0 votes
1 answer
143 views

Could Gaza have been "one of the wealthiest states on the Mediterranean"?

According to this transcript, (I don't have access to the original interview), Robert Kennedy told Krystal Ball: The international aid agencies have given Hamas, have given Gaza more than 10 times ...
YouDontSay's user avatar
0 votes
1 answer
299 views

Increasing Returns to Scale and Perfect Competition

Increasing returns to scale due to internal economies are incompatible with perfect competition BUT increasing returns to scale due to external economies are compatible with perfect competition SOURCE:...
user205152's user avatar
1 vote
2 answers
49 views

What downside is there to making the USD the national currency for your country?

I get that for huge countries like China, you can't have the US controlling your currency. But for some smaller countries, or new fledgling countries, why not have the USD be your national currency? ...
chausies's user avatar
  • 111
0 votes
1 answer
62 views

Does it make sense to evaluate a country's debt in GDP based on PPP?

Consider a fictional country Gudzan-Tservijstan with a GDP of \$100bn USD, a total (public and private) debt of \$100bn USD, and a PPP conversion factor of 2. Are there advantages to considering the ...
mjc's user avatar
  • 101
0 votes
0 answers
27 views

Is there a global flow of income?

If I understand the circular flow of income correctly, we can visualize money moving around the country in exchange for goods and services. Sources of money are the central bank (MB) and the financial ...
user avatar
1 vote
1 answer
35 views

Did both the U.S. and Zimbabwe economically benefit from dollarization?

Mugabe's leadership of Zimbabwe was harshly criticized by the U.S., citing human right abuses and economic mismanagement. Consequently, the U.S. congress passed the Zimbabwe Democracy and Economic ...
ATL_DEV's user avatar
  • 111
1 vote
0 answers
84 views

What are some good alternative textbooks in international trades for undergraduates other than 'Taylor & Feenstra' and 'Krugman, Obstfeld & Melitz'?

I've been referring to the textbooks International Economics by Alan M. Taylor and Robert C. Feenstra and International Trade: Theory and Policy by Marc Melitz, Maurice Obstfeld, and Paul Krugman ...
Hopeless Economist's user avatar
0 votes
0 answers
46 views

What is the logic behind Krugman's argumentation about dumping?

I don't quite understand what he is trying to say. As I see it, a lower marginal cost should lead to an increase in export prices, not the opposite.
Jose-Espinar's user avatar
0 votes
0 answers
9 views

Is there a term for an international market in which firms cannot break even without subsidisation?

There are (and have historically been) various sectors whose firms frequently receive subsidies from their home government, for instance because they are perceived as "strategic". Is there ...
Dan's user avatar
  • 1,356
1 vote
1 answer
43 views

Why are subscriptions to the World Bank's IBRD measured in 1944 US dollars? How is this calculated?

Several official documents published by the World Bank's 'International Bank For Reconstruction and Development' (IBRD), such as https://pubdocs.worldbank.org/en/795101541106471736/...
M. Y. Zuo's user avatar
  • 121
0 votes
1 answer
57 views

Euler Equation - small open economy

How would I find the Euler equation for: $$ U=\sqrt{C_1}+\beta{\sqrt{C_2}} $$, where $$\beta=1/(1+r)$$
f.Greening's user avatar
2 votes
1 answer
158 views

Why does not Uncovered Interest Parity hold exactly? Or does it?

I am using the UIP condition before taking an approximation and, therefore, expecting UIP to hold exactly. I want to understand why UIP calculated for a pair of currencies a) does not hold exactly (...
TeX_novice's user avatar
2 votes
1 answer
75 views

International Spillovers of environmental policies

I'm trying to put together a literature review of papers tackling the international spillovers of environmental policies, particularly theoretical contributions. I haven't been able to find much. Any ...
user37250's user avatar
  • 331
2 votes
0 answers
87 views

Questions regarding Solving Melitz (2003) model

I am editing my question regarding solving the model in order to be more specific. Regarding the demand side, In the beginning of the model, we have a CES utility function over a continuum of goods ...
zmhs's user avatar
  • 21
1 vote
2 answers
119 views

What actually is comparative advantage?

Is comparative advantage determined by simple productivity? In other words, a production function that takes in... some kind of input, uses labor, and capital, and produces an output? In this case, is ...
john's user avatar
  • 11
3 votes
0 answers
41 views

Covered interest rate parity: the forward contract is not risk free

Covered interest rate parity (CIRP or CIP) can be formulated as: $$ (1+r_{f,Home})=\frac{S_0}{F_{0\rightarrow 1}} (1+r_{f,Foreign}) $$ where $r_f$ are risk-free rates in the home and foreign countries,...
Richard Hardy's user avatar
8 votes
4 answers
5k views

Can someone explain why sterling-dollar parity is bad?

Please forgive the probable naivety of this question. I am not an economics student I am just trying to understand the currency fluctuations that are currently occurring with GBP as a result of our ...
thomasbishop's user avatar
1 vote
0 answers
32 views

How does high external debt hurt GDP?

Really confused by this. Say debt burdens increase and country A now has to spend more of its income towards servicing its debt to country B, causing a fall in consumption. Country B now has more ...
ThomasJ's user avatar
  • 177
-1 votes
1 answer
40 views

Why does the government spending increase by the "same" amount as the demand?

I know that governments can increase demand by increasing employment, transfer payments, and capital for the private sector. Why does government spending increase by the ""same"" ...
student's user avatar
  • 65
2 votes
1 answer
143 views

Why doesn't the consumption function include savings?

Why doesn't the consumption function C=C(Y-T) include transfer payments? If we assume that C=MPC(Y-T), and that the MPC assumes that one part of the increase of income goes to savings. But what about ...
student's user avatar
  • 65
1 vote
2 answers
84 views

Why is the 'marginal productivity of a factor' of any relevance in the Cobb-Douglas production function?

I don't understand its importance in this production function. I know that the productivity parameter is A in the function: $F(K,L) = AK^α L^{(1-α)} $ So what could it be? Thank you!
student's user avatar
  • 65
0 votes
1 answer
291 views

In the Cobb-Douglas production function, why do K and L have these effects?

Why does an increase in K lead to an increase of MPL, and to a decrease of MPK? Likewise, why does an increase in L lead to a decrease of MPL, and to an increase of MPK? Thank you.
student's user avatar
  • 65
0 votes
2 answers
101 views

Why is it Y=F(K,L), and not Y=F(K,L, Economic profit)?

Initially, we have the distribution of income: Y = MPLxL + MPLxK. But, when the economic profit = 0, we have constant returns to scale. And since, input=output, if I am not mistaken, there is just ...
student's user avatar
  • 65
5 votes
1 answer
99 views

Why is inflation higher in emerging economies?

Inflation rates are higher in emerging economies than in developed economies. (source) Why is that so ? Most explanations I have found refer to some kind of catching up, but it does not immediately ...
Anthony Martin's user avatar
0 votes
1 answer
104 views

How to have the yearly index when having monthly index?

From (Benigno, 2022) I have an index called Global Supply Chain Pressure Index (GSCPI) provided at the end of the post. The index was shared at monthly frequency. A part of the data provided is as ...
Phil Nguyen's user avatar
  • 1,130
0 votes
0 answers
23 views

Perception of value between different currencies

So let's say I am going to sell a game and I'm trying to come up with a fair price. The thing is, I am from Brazil and I'm selling in an online platform where most products are priced in dollars. The ...
Gustavo HK's user avatar
0 votes
0 answers
28 views

Why Developing countries, especially exporters are most vulnerable to strong US Dollar?

Developing countries, especially exporters such as Argentina and Turkey, are among the most vulnerable, says Harvard economics professor Jeffrey Frankel. Excerpt from: https://www.bloomberg.com/news/...
q126y's user avatar
  • 133
2 votes
0 answers
17 views

How to convert national poverty into an international comparable measure?

I want to compare the poverty of a subpopulation of my country (indigenous people) to other countries' poverty. To do that, I have the per capita income of each individual of my dataset expressed in ...
Santiago Valdivieso's user avatar
1 vote
1 answer
64 views

Foreign Currency Reserves: Profit / Loss from Foreign Currency Depreciation / Appreciation?

From Wikipedia article on foreign exchange reserves: The central bank may, however, profit from a depreciation of the foreign currency or incur a loss on its appreciation. Why does the depreciation ...
Per48edjes's user avatar
3 votes
1 answer
107 views

Does culture effect micro economics?

In different parts of the world, we have different attitudes to money , spending and value different things importantly. Does this mean that we require different micro Economic theories which are ...
tryst with freedom's user avatar
0 votes
0 answers
19 views

Inflation or CPI times CURRENCY/DOLLAR rate?

Is there a database which follows the inflation or cpi MULTIPLIED by the forex rate. In order to calculate the change in cost of living around the world relative to ONE, NORMALISED base currency, ...
gdcpb's user avatar
  • 101
12 votes
6 answers
3k views

How do economic sanctions work? How do they not create an arbitrage opportunity?

(Not sure if this should be on Politics.SE) This is something I've been thinking about since the Russian invasion of Ukraine. Many countries enacted sanctions on Russia in response. Let's say one of ...
Allure's user avatar
  • 1,304
-1 votes
1 answer
52 views

Why does a stronger US dollar translate to potentially lower sales and earning for Microsoft?

A recent headline stated: "Microsoft Corp. cut sales and earnings guidance for the fourth quarter, citing unfavorable foreign exchange rates as the stronger U.S. dollar takes a toll." ...
End Anti-Semitic Hate's user avatar
0 votes
1 answer
30 views

Are Estonia, Iceland, Hungary and Greece in a similar economical level?

I was wondering whether the Estonian or the Icelandic economies, despite being small, are relatively close to the Hungarian and the Greek economies, or whether they are much smaller Therefore, are ...
vengaq's user avatar
  • 101
4 votes
1 answer
2k views

Why does Russian ruble conversion rate to USD remains constant at 1 to 0.01?

I've been noticing that since Russian ruble started losing its value compared to other foreign currency, at some point it became at constant exchange rate of 1 RUB to 0.01 USD. That is, every day no ...
Pizza's user avatar
  • 143
-1 votes
1 answer
23 views

Most innovative business model for companies today

I am not sure if this is the right place to ask questions on this topic, but My class on International business has been asked to present a business plan that will work in the international market, ...
Vedanta Mohapatra's user avatar
1 vote
0 answers
18 views

Is Bank for International Settlements still providing financial services to Afghanistan?

After the Taliban takeover of Afghanistan in August 2021, most of the major central banks such as the Fed, Bank of England, and Bundesbank froze FX reserves of the Afghan central bank (DAB). As of ...
Yoda's user avatar
  • 93
1 vote
0 answers
34 views

Is foreign aid loans?

I see that America is giving tons of foreign aids. Is that loans?? Or just money without expecting any returns?? Help me understand the loans given to other countries and aids.Also during military ...
Socraticlad's user avatar
1 vote
1 answer
68 views

Which industries are widely agreed upon to require central regulation on a national basis, regardless of economic or political system?

For example, the most straightforward cases of widely accepted centrally controlled regulation on a national basis would be the nuclear power generation and nuclear fuel supply industries. Where every ...
M. Y. Zuo's user avatar
  • 121
1 vote
1 answer
60 views

Why does interest rate differential affect capital flow in equities?

With the recent news of US fed hikes, there are emerging markets where central banks have decided not to raise rates, like in India, Indonesia, China, etc. The common theme I read everywhere is this - ...
qwerty_uiop's user avatar
4 votes
1 answer
96 views

Homothetic preferences for international trade

In international trade class, we assume homothetic preferences for every country, and each country has an endowment. Why do we assume homothetic preferences? Is this because we see (from data) that ...
Giskard's user avatar
  • 29.5k
1 vote
0 answers
200 views

Asking for the explanation of the result of DDD?

I am following Stata package to run the did_imputation of Borusyak,2021 in using the DiD imputation estimator The normal DiD estimator in their regression is did_imputation Y i t Ei [if] [in] [...
Phil Nguyen's user avatar
  • 1,130
0 votes
1 answer
33 views

How to visualize when the signs of two subsamples are opposite and example? (Simpson Paradox)

In some studies, when we do subsample and if it is nice, we may see the signs of coefficients of variables of interests are consistent among the whole sample and subsamples. However, it is not always ...
Phil Nguyen's user avatar
  • 1,130

1
2 3 4 5