Questions tagged [international-trade]

International trade theory is a sub-field of economics which analyzes the patterns of international trade, its origins, and its welfare implications.

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unit iso-quant curve and unit iso-value line

This question is about international trade theory. For the labor L and capital K, I know the theory of iso-quant and iso-cost. The price will be determined where iso-cost line touches iso-quant curve. ...
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Stolper Samuleson Theorem [closed]

According to the Stolper-Samuleson theorem, as a small open economy that is capital abundant opens up to trade: a) Owners of capital are relatively worse off than workers b) Owners of capital are ...
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Log deviation from steady state - understanding a journal paper

I hope a question like this is fair game on this website! I'm doing some research for my thesis, and have come across what seems to be a pretty simple model - two countries, A (representing the USA) ...
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Most outsourced industries of USA?

Which industries reduced the most in the USA as a result of outsourcing and imports? Maybe textiles is one of them. I heard about a rust belt. Which ones are the others?
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connection between foreign assets and trade surplus / deficits

I am reading Piketty's "Capital in the 21st Century" and in Chapter 5 he writes "Furthermore, the evolution of a country's net foreign asset position is determined not only by the ...
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What are some examples of goods that entrepreneurship-intense?

Entrepreneurship is considered to be one of factors of production (the other factors of production are capital, labor and land). According to Heckscher–Ohlin model, a country that has an abundant ...
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What is technology in the Ricardo model?

I've been reading about the Ricardo and Heckscher-Ohlin models. I'm having trouble following what makes a worker in the former able to produce more or less of a given good. So e.g. suppose a US worker ...
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How does the imposition of import duties affect the nominal and real exchange rates in the long term?

Let's assume that a country imposes an import duty on goods imported from abroad. How will this change the long-term real exchange rate between domestic and foreign currencies? How will it affect the ...
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What'll happen to production and consumer distortion loss in a large country with tariffs?

Suppose here $P_0$ is the initial world price, and after tariffs is imposed the world price drops to $P_1$. What would be the production distortion loss and consumer distortion loss? Would it still be ...
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Which countries have the comparative advantage in Ricardo's example?

I am a complete beginner here trying to learn through Khan Academy. I found some data that correspond to Ricardo's explanation of comparative advantage. According to Wikipedia "England has a ...
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Optimisation and Theory of Comparative Advantage

In my school's lecture notes on International Trade, a numerical example of how the Theory of Comparative Advantage is featured. It is a simplified 2-country, 2-goods model and features constant ...
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What are “targeted supplies”?

From New geopolitics of natural gas: the policy of assisting friends can include price discounts, [targeted supplies] , or financial or technological support to develop energy resources for partner ...
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Why does a tariff have no effect to an exporter?

I'm reading Principles of Economics, the paragraph about tariffs in a imaginary country Isoland wrote: "The Isolandian economists next consider the effects of a tariff—a tax on imported goods. The ...
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Why would a low wage country affect negatively the high wages of a country with trading?

I was reading a book that asked this question. "Does trade with low-wage countries depress wage rates in high-wage countries?"Why did they mention specifically low-high wages countries?
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Why didn't other oil pricing benchmarks such as Brent go negative?

This question is asking why the oil (in this case, WTI) price is negative. While I think I have broadly understood why WTI collapsed, I don't really understand why other oil pricing benchmarks didn'...
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Financial Economics and International Economics

What is the difference of Financial Economics and International Economics? Why, How? What are the implications of these differences? Will a model of international economics suddenly become a model of ...
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How does the trade problem in Ricardian model of int'l trade work?

Sorry if this question seems fragmented; I have minimal background in economics, I just grabbed some notes and began studying. The scenario is given as: "Suppose Germany needs to make a 1 billion ...
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What is the impact of inflation on Pakistan's exports?

I want to know about the relationship between inflation and exports. What is the effect on exports when inflation increases or decreases?
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Which countries produce ventillators, and which countries are importing ventillators?

I am interested in finding out where ventilators are produced and which countries are importing ventilators. I found only bits and pieces online. Interested with global supply chain and current ...
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How can you define a commodity's level of pollution intensity?

I am doing a report on whether environmental regulation has an impact on goods exports for the UK (Using difference-in-differences). I have export data from 1990 to 2018 split by SITC codes. However, ...
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Why do we spread knowledge across nations?

We have access to lots of knowledge on paper sharing platforms, open course platforms, open-source platforms and question asking platforms and etc. I don't know why we are not afraid of the backfires ...
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Export is high sensitive to external income. How can be this explained?

I am estimating an export equation, where dependent variable is export and independent variables are exchange rates, external income and other controls. Each coefficient is an elasticity. The results ...
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Best reports / data sources on economics flows / trade between US & China?

curious for any suggestions on reports or data sources on trade and flows between the US and China? In addition, the impact that the current political frictions could potentially have moving forward ...
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1answer
43 views

How can I control for trade between UK and Australia in my difference-in-difference trade model?

I am doing a report on whether environmental regulation has an impact on trade, using a difference-in-difference model and seeing whether the EU Industrial Emissions Directive had an effect on UK ...
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1answer
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Does the UK have a trade agreement with Australia?

Since the UK was a member of the EU, I'm assuming the EU was responsible for any kind of trade arrangements between the UK and Australia, but I'm not entirely sure. Does the UK have an agreement with ...
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If a Chinese person wants to buy an iPhone or any international goods, which GDP per capita would be a better indicator?

Which GDP per capita of a Chinese citizen would better reflect their affordability- Nominal GDP per capita or PPP GDP per capita of China? My question is would PPP would matter much in case of buying ...
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Finding data on (estimated) trade cost elasticities of imports

I'm an undergrad student of economics, and I need to find estimates of the trade cost elasticity of the UK's imports for some homework. My instructors pointed me to the World Bank's databases, ...
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Why do we have autarky price of mud pies equal to 0.5 of cheese, while it must be zero?

(It's assumed that we work with the Ricardian model) Absurdtopia is an autarky. Production of 1 mud pie requires 1 labor, while production of 1 cheese requires 2 labor. We know that price of 1 mud pie ...
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Why do we say that trade and specialization according to comparative advantage lead to one-time increase in PPF of given country?

PPF shows us different combinations of goods that we would be able to produce if we employed existing resources of our country in the most efficient way. One thing to notice about PPF: It's ...
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How a country buy stuff from other countries? and what is its means of exchange?

I was thinking about this scenario, where a country X wants to buy some toys (worth of 100$) from country Y. both of them have their own currency-- not USD. So, now,...
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Would GDP for a pure endowment economy be equal to zero?

(Am I correct?) As far as I understand, a pure endowment economy means that good just appears in the country without any labor involved in producing them. Like maybe given country lives entirely from ...
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Do I make correct conclusions about international trade (and ways to increase GDP) from the expedenture approach formula for GDP?

(Please correct me if my reasoning is wrong somewhere) Net Exports is a part of GDP and consequently its increase or a decrease also causes GDP to increase or decrease, assuming everything else stays ...
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Balance of Payments and Capital Inflows

We know from the balance of payments identity that: $$ BOP=CA+KA+FA=0 $$ where $CA$ is current account, $FA$ is financial account, and $KA$ is capital account. The BOP is an identity that always ...
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Who exactly suffered more in the US-China trade war?

The US and China signed a trade deal recently that made the news. Shortly afterwards, Nobel-prize winning economist Paul Krugman claimed that the US lost the trade war. His argument is that US ...
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(Ricardian model)Is it correct that complete specialization in comparative advantage CAN lead to DECREASE in total production?

I have the model in my electronic spreadsheet (created by me) and its results quite suprised me. In short, complete specialization (I just call it specialization) in good where a country has ...
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Interpretation of dummy variable : Random Effects Model

I am running a RE regression and I have export similarity index between two countries as the dependent variable and have a dummy variable such as share a border(=1 if countries share border, 0 ...
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(Modified comparative advantage model)Can trade with a country that only has one industry be mutually beneficial?

Suppose there are two countries, China and Japan. Suppose there are also only two goods, namely food and bronze mirrors. China produces both food and bronze mirrors, while Japan produces only food. In ...
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Where to find a brazilian claim from german geologist Eschwege?

In Das Kapital, ch I.1, Marx says that german geologist Eschwege claims that total product of the Brazilian diamond mines for the eighty years ending in 1823 still did not amount to the price of ...
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Intuition for factor price insensitivity in Heckscher-Ohlin

I'm trying to develop some intuition for why factor prices are independent of factor endowments in a small open economy (in a standard Heckscher-Ohlin 2x2x2 setting with diversification and no factor ...
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What faction determines the strength of a state's currency and can that faction be rebelled?

I know that to determine the strength of a state's currency (a currency's Equilibrium Price), the following factors are contemplated by some faction, but I don't know what is that faction. ...
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What does 'currency convertibility' mean?

As a student with almost zero background in economics, I've been struggling to comprehend the notion of the currency convertibility. Most of the definitons I've found online talk about the ease with ...
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Testing the Marshall-Lerner Condition

Assuming initially £1=$2 Exports Px £100 QDx1 500 Export Revenue £50,000 Imports Pm1 £50 QDm1 1000 Import Spending £50,000 Trade Balance = £0 After a 10% depreciation of the £ Assuming PEDx = -0....
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Heckscher-Ohlin with non homothetic preferences [duplicate]

Can someone tell me how I can show with an example that the Heckscher-Ohlin result does not necessarily hold when preferences are not homothetic. I was asked if it similar as a case in which the ...
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How does protectionism harm the producers and workers in export sectors in the country implementing the protectionist policies?

According to Protectionism (Protectionism) also reduce trade and adversely affect consumers in general (by raising the cost of imported goods), and harm the producers and workers in export ...
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Perfect multicollinearity when estimating a gravity model

everyone! I am estimating a gravity model in order to analyze the impacts of tighter environmental regulations on international trade. More specifically, I am analyzing Brazil's trade flow. My (...
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Is there a way to adjust trade data between China and EU member countries for the Rotterdam effect?

Basically Eurostat trade data for individual EU member countries with China seems to have some substantial artefacts probably because most EU imports from China arrive in Dutch ports, even though ...
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How are trade deficits financed?

The usual answer is either "foreign debt" or "Foreign Direct Investment". But: Why does that make sense? And why wouldn't be financed otherwise like from importers taking out bank loans domestically ...
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Alternatives to avoid sanctions

Recently we saw that the EU and Iran devised an instrument called INSTEX to avoid dealing in U.S. dollars and, hence, avoid U.S. sanctions. Similar thing is being planned between India and Russia (...
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Historically has the “decoupling” of world trade from GDP not lead to (or deepened) a recession?

The ECB speaks (somewhat euphemistically, in my opinion) of a "decoupling" of world trade from "activity" (i.e. GDP) in Q1 2019: Historically, has it been the case that such a "decoupling" can last, ...
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Why is the Australian dollar, often viewed by traders as a proxy for the Chinese economy?

The Australian dollar, often viewed by traders as a proxy for the Chinese economy, gained 0.3 per cent against its US counterpart. From: S&P 500 hits one-month high on renewed trade hopes (...

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