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.
225
questions
2
votes
1
answer
72
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 ...
- 321
2
votes
0
answers
71
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
...
- 21
0
votes
0
answers
13
views
Recently China increased the import quota on crude oil to 20% from last year. Why would they do that? What will be its impact on the economy?
Can someone explain why? Because I thought it had to something with increasing domestic market competition but I am very confused. Any help would be appreciated.
1
vote
2
answers
97
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 ...
- 11
0
votes
0
answers
12
views
Deflators for global GDP
I have annual global GDP in 2015$ prices (i.e. the chart here: https://data.worldbank.org/indicator/NY.GDP.MKTP.KD). If wanted to change the price base year here, say 2015, what deflator series to I ...
- 336
3
votes
0
answers
29
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,...
- 2,131
0
votes
0
answers
66
views
A comparative advantage problem in Dominick Salvatore International Economics
I'm recently encountering a question in Chapter 2 The Law of Comparative Advantage in the supplementary test bank of International Economics written by Dominick Salvatore
If nation A can produce 5 ...
- 153
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 ...
- 97
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 ...
- 167
-1
votes
1
answer
31
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"" ...
- 55
2
votes
1
answer
137
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 ...
- 55
0
votes
1
answer
36
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!
- 55
0
votes
1
answer
58
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.
- 55
0
votes
2
answers
58
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 ...
- 55
5
votes
1
answer
83
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 ...
- 246
0
votes
0
answers
10
views
How to get the data of Supply Chain Index Pressure for each country?
From the introduction of NY Fed, they have an index called Global Supply Chain Pressure Index (GSCPI).
I can retrieve the GLOBAL Supply Chain Pressure Index from their website.
However, they also ...
- 1,068
0
votes
1
answer
36
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 ...
- 1,068
0
votes
0
answers
10
views
How to handle Free Zones in international trade data?
I have a import trade data of country "A". This trade data includes some categories :
National Trade
Free zones
Other
The data collection method is unknown to me, so I don't know if Free ...
- 101
0
votes
0
answers
21
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 ...
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/...
- 133
2
votes
0
answers
14
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 ...
1
vote
1
answer
51
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 ...
- 11
0
votes
0
answers
12
views
Impact of current account on FX performance
I was wondering if someone can explain why countries running current account surpluses should expect their currency to appreciate while countries running current account deficits to depreciate?(...
3
votes
1
answer
82
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 ...
0
votes
0
answers
17
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, ...
- 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 ...
- 1,198
-1
votes
1
answer
49
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."
...
0
votes
0
answers
24
views
Is it true that temporary and permanent fiscal expansions do not have different effects under fixed exchange rates?
In both cases: Basically, since a government is under obligation to fix the exchange rate: In the sort run, After DD's shift to the right, AA will be shifted to the right by increasing money supply. ...
0
votes
0
answers
8
views
What does "U-shaped predictive pattern that peaks at 12-month forecast horizon" mean?
When reading the paper of Han 2020, I saw a sentence
Finally, international evidence suggests that the BDI has an inverted
U-shaped predictive pattern that peaks at 12-month forecast horizon.
I am ...
- 1,068
0
votes
1
answer
29
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 ...
- 101
0
votes
0
answers
26
views
What is a "full blocking" sanction on a bank?
In the wake of the Russian invasion of Ukraine, the United States announced a range of sanctions on Russian banks. These include (Source)
"full blocking sanctions on VTB Bank, Russia’s second-...
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 ...
- 143
-1
votes
1
answer
22
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, ...
1
vote
0
answers
17
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 ...
- 93
1
vote
0
answers
29
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 ...
- 11
1
vote
1
answer
66
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 ...
- 111
1
vote
1
answer
54
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 - ...
- 23
4
votes
1
answer
72
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 ...
- 28k
1
vote
0
answers
124
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] [...
- 1,068
0
votes
1
answer
30
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 ...
- 1,068
1
vote
1
answer
106
views
How does a trade deficit affect GDP?
How would an increase in the trade deficit affect GDP?
As per the majority of sources I’ve read such as Investopedia, they claim that GDP would decrease due to a decrease in the NX component of the ...
- 167
-1
votes
3
answers
116
views
What is the term for the means of conducting international financial transactions?
I'm looking for a term (say "X") that describes a general category of process. Over time, the details of the process or even the process it self changes, but they would all still fall under ...
- 107
2
votes
1
answer
756
views
On what basis do countries repay international loans?
Most countries have their own sovereign currency. Essentially they can print their currency. So how do countries repay their loans? And a similar question would arise while granting a loan to another ...
- 23
0
votes
0
answers
61
views
Proof of Factor Price Equalization
Assumptions:
2 nations - 1 and 2
2 goods X and Y where X is labour intensive and Y is capital intensive
Perfect competition across commodities market
same technology in both nations
both face ...
- 1
1
vote
0
answers
22
views
When we should use SIC2 and SIC3 in fixed effect?
SIC is the industry classification. The definition of SIC from Bigelli, 2006 is
Due to the low numbers of firms in some industries, we use the most
detailed industry (SIC4) only if the number of ...
- 1,068
1
vote
0
answers
19
views
How leniency laws are ineffective in destabilizing cartels in Dong(2019)
In a paper, Dong, 2019 mentioned that leniency laws can destabilize the cartel or induce the formation of new cartels. Their argument is as below
- Leniency destabilize the cartels
On the one hand, ...
- 1,068
0
votes
2
answers
123
views
Why do oil-rich countries need expats?
In particular, why did/do the smaller states in the GCC need expats in their country? Ignoring the history of the country prior to oil discovery (which can be approximated for many of the smaller GCC ...
- 1
1
vote
0
answers
29
views
Lectures notes on international trade
do you have any lecture notes covering the theories of international trade (Ricardian models, HOS, Melitz...)? I have a master in quantitative econ so I'd be happy to have both basic references and ...
- 447
-1
votes
2
answers
59
views
How can I add distance variable to panel data?
I'm working on a gravity model with a panel data. However, the distance variable for this model is a time-fixed effect so it doesn't seem possible to run the model with it.
What can I do to add this ...
- 107
0
votes
1
answer
19
views
How to classify the developed and emerging market worldwide?
I am doing a cross-country research where different countries implement anti-corruption at the different year. I want to examine the impact of the laws in each set of countries (developed and ...
- 319