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.

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6
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2answers
117 views

How will London's role as a financial center be affected after the Brexit and what are possible alternatives?

I looked around on this site and couldn't find anything close to what I'm asking on Economics SE, so I hope it is the right place to ask. I am interested in but have no background in economy, so all ...
7
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2answers
837 views

Can a closed economy flourish?

I was wondering if it is possible to run a country based only on domestic economy and not to enter the world economy. Basically, if certain economy of a certain country fails and poses threat to world ...
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0answers
35 views

Argentina taxes

I don't understand this report http://uk.businessinsider.com/wef-27-countries-with-the-highest-tax-rates-in-the-world-2016-2 How can it be that Argentina turnover tax is 90% of income (everywhere ...
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0answers
171 views

What are the pro's and cons of GST (goods and service tax) ? And what influence it can make in the Indian economy? [closed]

As government is planning to introduce GST in India, what change it will make in India's economy? GST is introduced in many countries except American, so why American has not introduce GST yet?
3
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1answer
321 views

Screw foreign investment, lets just print money

We often hear of countries securing foreign investment. Stores like this are trumped as major achievements. Foreign investment also has criticisms - profits generated in a country end up going abroad, ...
0
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1answer
55 views

Monetary Policy and international reserves— interpretation of the estimated coefficient

I have a problem in interpreting a coefficient in my regression below: I am estimating the following regression in the spirit of an event study analysis with daily data: $\Delta ER_t = \beta_1 ...
2
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1answer
108 views

How will the economic effects of Brexit impact a middle-class American family?

On the news it was stated that the UK leaving the EU has already caused trillions of dollars of loss to the world economy. While the newscaster made it sound very serious, I don't have any ...
1
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1answer
392 views

How does an import driven economy function?

Can a country's economy,where everything is imported from other countries, solely depend on the income from its retail industry?
2
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1answer
45 views

Is there anything like ratio between number of manufacturing industries to number of retail shops?

In my country there are very few manufacturing factories,but large numbers of small retail shops (like one shop per house or may be even more). What are the effects in the economy of a country for ...
6
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1answer
395 views

Omitted variables in gravity model

I'm trying to construct a gravity model for EU trade flows using a panel dataset, but am suffering from what appears to be a persistent omitted variable problem. My residuals display a queer log-like, ...
2
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0answers
44 views

Why is the current WDI missing CPI data for some countries (including the UK and China)?

I'm downloading data on inflation in different countries, and using the World Bank's World Development Indicators (WDI). Specifically, the Consumer Price Index series (CPI). (http://data.worldbank.org/...
0
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1answer
40 views

Differences between international and national creditors

When considering a nations debt, how does it affect the nation whether its debt is held by national or international creditors? If there is preference does this translate into different prices for the ...
1
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1answer
111 views

What are all the countries that have a value added tax? [closed]

I'm a web developer (not an economist) and i'm working on a program that deals with value-added tax (VAT), maybe it is a stupid question but, is the value added tax obligatory? I just want to know if ...
1
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0answers
109 views

Why shouldn't the relative prices change in the Heckscher-Ohlin model?

I'm having trouble with the Rybczynski theorem. Let's say there's a migration to the domestic economy, increasing the Labor endowment. It states that the production of the good that uses labor more ...
3
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2answers
586 views

Why are some goods without close substitutes not sold in some countries?

Especially in consumer electronics, a large number of goods are offered only in some countries. Usually this holds only for products which have some close substitutes available (e.g., screens, where a ...
0
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0answers
499 views

Why does only relative price and not absolute price matter in international trade models?

Suppose I have two teachers: Adam and Bob. Suppose Adam takes 20 hours to lecture and 30 hours to grade, while Bob takes 100 hours to lecture and 60 hours to grade. In absolute terms, Adam is ...
2
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1answer
204 views

In the Ricardian model, why are two out of 3 cases invalid?

I am considering the Ricardian model. There is an economy with two countries $S,T$. Two goods $a,b$. Each country has linear production technology with labor ($\ell$) as only factor of production. $...
4
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3answers
158 views

Is the development of “developing countries” evidence against the idea that former colonial powers owe their headway to exploitation?

There is a recurring narrative (especially but not exclusively in left-leaning circles) that today's "developed nations", particularly Western former colonial powers, owe much of their wealth and ...
3
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3answers
152 views

Are markets inherently short sighted?

If markets are types of "information systems", how do they assist in the attainment of a future common objective that is beneficial or even necessary to a society? Since markets are driven by ...
0
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1answer
60 views

Are Microeconomics limited to one country?

For my IB Econ internal assessment I want to comment on the falling oil prices across the globe. Would this be covered under Micro because it's 1 specific market? or is it international because it ...
2
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2answers
11k views

Why does the Balance of Payments have to (more or less) equal zero

It seems to me that the non-reversible transactions included in the current account, and the reversible transactions included in the capital and financial account, are unrelated, and should therefore ...
3
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2answers
62 views

China causing Currency War

Recently there have been reports of China devaluating its currency against the U.S Dollar. I'm a layman and I am unable to understand the need for a country devaluating it's own currency. How would ...
2
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1answer
122 views

Why do all countries recognize foreign wealth?

Recently I learned that by 2016 that 1% of the population will have 50% of the worlds wealth. That means that more than 50% of individuals actually has less than he would in a totally fair economy. ...
7
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2answers
469 views

Ricardo's theory of comparative advantage

The aim of this question is to better explore the mathematical economics model behind Ricardo's theory of comparative advantage and the claims that can be made based on this model. This seems ...
2
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3answers
322 views

Why does the IMF push for austerity?

Are there any countries that applied austerity measures and had a positive outcome that was attributed to it? Why do institutions like the IMF often encourage or require it?
2
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1answer
72 views

Should I use current prices or volumes estimates?

I am writing an empirical paper with National Account's data from the OECD. The analysis of the data consists basically in calculating the cross-correlations among countries of GDP, investment, ...
0
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1answer
92 views

Can the benefits provided by the Ex-Im Bank of the US be considered a Public Good?

With the debate surrounding the upcoming re-authorization of the Ex-Im Bank of the US, I wanted to hear from someone who might know. What is the best case to be made for its continued operation? I ...
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2answers
994 views

Floating exchange rate and cost-push inflation?

I have a trouble understanding the following text from my textbook. I bolded the fragments that don't make sense to me. "Disadvantages of a floating exchange rate: A floating exchange rate regime may ...
1
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1answer
2k views

Impact of Import Quota onto Revenues

I'm learning about quotas from my textbook but I've found one thing that doesn't make sense to me at all and I think it may be a mistake in the book. The context: $P_w$ is the price of wheat on the ...
3
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0answers
38 views

Any serious macro models for Greece's possible default or eurozone exit?

Since each news outlet says something about Greece these days, I wonder what serious economic research backs decisions made over the last seven years? The IMF papers on austerity, both early ones and ...
14
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3answers
655 views

Destroying the dollar

Let's destroy the USD dollar: I am the government of a small, economically and geopolitically unimportant country that has its own currency and a local central bank. I order the local central bank (at ...
6
votes
2answers
300 views

If Greece defaults, can it still stay with the euro?

Should Greece default, a forced conversion from euros to drachmas will be a further catastrophe to Greek economy as the drachma will quickly collapse. However, if Greece leaves the Eurozone, but keeps ...
12
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3answers
939 views

Why does China buy so much US treasury debt?

What is the reason that China buys so much US debt in form of Treasuries? How does this help the Chinese economy? It seems they are willing to give money to USA so USA economy can function better (...
5
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1answer
122 views

Do we have some evidence of overshooting?

I was going through overshooting of exchange rates (which I probably haven't seen since undergrad) and it seemed to me that the story is a bit of a stretch. I wonder if there is some empirical test ...
2
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0answers
29 views

The new AIIB, Japan and America

The AIIB is the Asian Infrastructure Investment Bank. It's an international financial institution proposed by China. Almost all Asian countries have joined and a lot of European countries. Here is the ...
4
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1answer
114 views

Introductory or Primer text on Economics?

I've been meaning to learn more about economics, and am looking for an introductory text or a primer on the topic. I've already taken a subject on this back in high school, but I guess what I'm ...
1
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0answers
40 views

Deriving Marginal Product For Hecksher-Ohlin

I'm using the second edition of applied international trade by Bowen and for the HO model, the marginal product with respect to capital ought to be the first term of the final answer (as given in the ...
1
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0answers
173 views

How does a country increases or decreases it currency value (exchange rate) against other nations currency?

I want to know how a country, Mexico for instance, keeps the exchange rate higher or lower against other nations currency, USD, EUR, JPY. How does the value of a nation currency is valued against ...
6
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2answers
2k views

Why could China, much poorer than US, lend so much money to US?

The GDP per capita of China is only a fifth of that of US. But China has lent more than a trillion dollars to US. How could the much poorer China lend so much money? Where did those money come from?
5
votes
1answer
114 views

“Buy a country”, expression or possibility?

I keep hearing the term, "enough money to buy a country". My question is: Is it realy possible to buy a country or is this just an expression? and if so how would this work since there is no 1 person ...
3
votes
1answer
61 views

Do German Goverment bonds usually include (or included) a condition that the debt will not be serviced in case of trade imbalance?

Today the Spiegel ran an article on a proposal to end the Euro Debt Crisis. That article made the claim given in the title Syriza will eine sogenannte Wachstumsklausel für jene Schulden einführen, ...
10
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2answers
323 views

Are there any states that don't have debt?

I've not been able to find any states that don't have debt to other states. This, to me at least, seems really strange. Are there any nation states that are not in debt to other states, if so which ...
1
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1answer
60 views

What are the most popular technical models used for forecasting exchange rates in international economics?

Are there any de facto standards when publishing, or is there substantial latitude in deriving one's own methodology? I understand in practice, even the St. Louis Fed is gently skeptical of the ...
5
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2answers
164 views

How does the russian interest rate raise will defends the Ruble from devaluation?

This strategy (interest raise to minimize currency devaluation) is being adopted in countries like Brazil and Russia: Brazil interest rate http://www.tradingeconomics.com/brazil/interest-rate Russia ...
6
votes
2answers
5k views

Fixed vs pegged exchange rate: What's the difference (if any)?

I am told very firmly by an economist that a pegged exchange rate is NOT the same thing as a fixed exchange rate. So what, if any, is the difference between the two? Addendum: Here's one webpage ...
6
votes
1answer
750 views

Purchasing Power Parity (PPP) and Law of One Price (LOP)

If PPP were to be satisfied in reality, does that mean the Law Of Price is satisfied for all goods in a basket of goods used to generate the price levels of the country? Or, since PPP uses only ...
11
votes
2answers
626 views

Effect of a permanent increase in government expenditure in an open economy?

In Krugman & Obstfeld's International Economics, 8e, Chapter 16, an involved argument is given showing that a permanent fiscal expansion will not affect output even in the short run. It seems to ...