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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How to solve this comparative static?
I want to study how $n$ varies with $m$. They have the following relations:
$$n^{-\frac{\sigma}{\alpha(\sigma-1)}}\left(\frac{\frac{f(\sigma-1)}{m}}{L-\frac{n\sigma f}{m}}\right)^{-\frac{1}{\alpha}}=n^...
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How do I solve this Krugman model?
Suppose that there's a country with $m$ workers that have the following preferences over the consumption of a Krugman composite good which is composed on individual varieties with elasticity ...
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How is the Joint Probability Density Function derived under the Multinational Production model?
I was reading the paper "Trade, Multinational Production, and the Gains from Openness" by Ramondo and Rodríguez-Clare.
In the paper （see Appendix A）, they define the following function for ...
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Is the concept of "Strong dollar/Weak dollar" a cycle?
I am trying to understand the reasoning of "strong dollar/weak dollar",
Weak Dollar: Leads to increased exports due to cheaper prices for foreign buyers.
Increased exports boost dollar ...
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is there any specific way to convert a country's gdp to us dollars?
I need to convert Indonesia's real/constant GDP(rupiah) base year 2010 to USD. is it like basic convert using exchange rate based on the year I look for? or is there other way?
I am concerned with the ...
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Balance of payment under double entry bookkeeping
Assume that during a certain period, Taiwanese residents engage in the following three economic transactions with foreign residents:
A. Taiwan exports $3 million worth of goods to the United States, ...
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Questions about current account plus financial account=0 and balance of payment deficit
If current account (CA) plus financial account (FA) always equal 0 under the double entry bookkeeping, then how does balance of payment deficit occur?
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Which european countries have closest economic ties with Qatar?
I am looking for information on the strength of EU-Qatar economic ties by country - in absolute terms and in proportion to the total amount of trade or GDP. I am not aiming at a deep economic analysis ...
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Why can the Lagrangian Multiplier be dropped in the inverse demand function?
I'm deriving the Antras and Helpman (2004) paper. The model assumes a nested CES utility function
$$
U = x_0 + \frac{1}{\mu} \sum_{j=1}^{J} X_j^\mu
$$
where $X_j = \left[ \int x_j(i)^\alpha \,di \...
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Why does an increase in the Dixit-Stiglitz price index lead to an increase in demand?
I'm studying the graduate international trade lecture notes by Treb Allen and Costas Arkolakis posted on their personal homepage. The first chapter covers the Armington model. After deriving the ...
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CES Price Index in Melitz (2003)
I am reading Melitz (2003), and I cannot understand why the CES price index can be rewritten as an integral including $M$ and $\mu(\phi)$. I find the lecture notes by Dave Donaldson (https://dave-...
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Derivation total demand using Roy's identity
I have a "resource-balance" equation of the form (imports in sector $i$) = (number of $i$ demanded domestically) - (number of good $i$ supplied domestically). I can't figure out how the ...
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Why did Malaysia's high-tech export share decline in Y2022?
Recent World Bank data on Malaysia's high-tech exports share show a sharp decline. What are the reasons for such a drastic structural change? Or is it just an error in the data? (I can find no ...
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Are agricultural products and crops measured and compared by monetary value, mass, volume or calorie content?
This may seem a weird or stupid question (my first one Economics SE), but....
Most of the time in the media I see, hear or read about percentages, such as, "X-percent of food consumed worldwide ...
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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 ...
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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 ...
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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 ...
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Current Account deficit but FX appreciating?
When the Current Account (CA) is in deficit it means there is less demand for a currency than supply so it should theoretically depreciate but sometimes this does not hold. When a country with CA ...
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How does CPI respond to change in shipping costs?
Is there any quality research that already attempted to quantify the effect of shipping costs on CPI or inflation? Preferably I am looking for an estimate relevant to EU (however, I understand there ...
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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 ...
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Internationalization of Chinese Yuan, and Chinese exports?
If Chinese Yuan is internationalised and more countries use it to settle payments, then wouldn't that cause strengthening of Chinese Yuan and make Chinese exports uncompetetive ?
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Deriving Unit cost function
Unit cost function is the minimum cost to produce one unit of output.
The solution to the above problem is:
where ai(w,r) is the amount of labour needed to produce 1 unit of good i at factor prices (...
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Would poorer countries be better off by cutting off all trade with rich countries?
A 2017 Guardian article covered research that outflows from developing countries, primarily by way of unrecorded capital flight, significantly outstrips inflows.
... for every $1 of aid that
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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:...
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direction of causality between Increasing returns to scale and economies of scale
Does increasing returns to scale cause economies of scale OR is it the other way around?
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the relationship between Returns to Scale and shape of Production Possibility Frontier (PPF)?
Guys any material that discusses the above in detail for a two commodity case?
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Would Bretton-Woods capital controls have prevented the export-based industrialization of China and the deindustrialization of the West?
I sometimes hear this in a certain kind of political discourse, namely that in the "good old days" of Bretton-Woods capital controls were a thing (I don't dispute this) and that consequently ...
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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 ...
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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.
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Why was the USD rangebound between 1987 and 1995 from an economic standpoint?
I'm trying to understand what caused this long period of range boundedness for the USD index from 1987-1995 from an economic standpoint.
From my understanding. In 1985 the USD had reached it's ...
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Could Foreign Exchange rates fluctuate under a Gold Standard system?
I recently read an article where it said that during the gold standard, right before world war 1, 1 GBP went from equaling \$4.87 to soaring up to \$6.75 . My understanding always was that Forex rates ...
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gravity model of trade
I am conducting an analysis to assess the impact of the CETA trade agreement on trading margins using the gravity equation. One of the challenges I'm facing is how to calculate the distance variable ...
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Why doesn't imports from receiving country match exports from sending country?
I was looking at import/export data between the Cayman Islands and the Netherlands on tradingeconomics.com (tradingeconomics.com/cayman-islands/imports/netherlands) and (tradingeconomics.com/...
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What happens when a country trades with a specific country using that country's currency?
Suppose, a country X trades with another country Y using Y's currency rather than widely ...
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Effect of the construction of the Suez Canal on economies of southern Africa
Merchant ships, before the inauguration of the Suez Canal, used to travel between large parts of Asia and Europe by travelling around Africa. I feel this must have boosted the economies of many of the ...
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Is John Maynard Keynes an economic liberal or an economic nationalist?
I am working on a research project about political economy. However, I stumbled upon differences in the interpretation of the orientation of John Maynard Keynes. Some sources indicate that Keynes is a ...
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BOP balancing to 0, use of capital and financial account
Please someone for the love of god help me. I can't find two sources on the internet that don't have conflicting or very difficult to understand information on the balance of payments.
I have various ...
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How could the economic cost of EORI number requirements in Europe be estimated?
A friend recently tried to ship me my laptop from Romania (a EU member) to Montenegro (a EU candidate member). Even though neither of us is a business, and the laptop was mine and used, my friend had ...
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How does breaking away from a larger nation effect the economy
I am working on making a fictional world, and I really want to make the economics realistic, so I decided to come here to ask questions. The context is that a large nation went through a large civil ...
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Measuring the Overall Effect of Joining a Trade Agreement
The UK has signed a deal to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP). The BBC comments that, on the government's own estimate, this will add only 0.08% ...
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Interpretation of the Elements of the Leontief Inverse (Total Requirements Matrix)
I found what I believe to be slightly different interetations of the individual elements of the Leontief Inverse (total requirements matrix):
Miller and Blair (2009) just after Equation (2.12) mention ...
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Factor changes in Melitz (2003) model
What would be the effect of changes in factor supplies, for example labor, on the open economy equilibrium?
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Does the Rybczynski theorem also hold in modern trade theory models?
Does the Rybczynski theorem also hold for modern Melitz (2003) type trade models?
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What is the economical perspective of the value of an egg globally if we take in some hypothetical considerations?
I am fairly new to economics and doing some research, so pardon my lack of knowledge on the topic if this is a dumb question.
The main question i have is: Does an egg have the same value around the ...
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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
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US WTO Most favoured nation tariffs higher than bound tariffs. Why?
.....so I was reading this:
https://blogs.worldbank.org/trade/picture-trade-types-tariffs-explained
"Bound Tariffs are specific commitments made by individual WTO member
governments. The bound ...
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Trade and Opportunity Cost
This is a question on opportunity cost. I had problem in solving the last part. Please help me out.
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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 ...
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How would the world economy change if intercontinental transport was five times more expensive than today?
I am asking this question in light of climate change mitigation. I am working with the assumption that many ways of emitting green house gases can be stopped with better technologies. Electric cars ...
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What is the acquired advantage theory in international trade?
Is it the comparative advantage or absolute advantage or something all together different?
