Stack Exchange Network

Stack Exchange network consists of 174 Q&A communities including Stack Overflow, the largest, most trusted online community for developers to learn, share their knowledge, and build their careers.

Visit Stack Exchange

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.

0
votes
0answers
26 views
+50

Financing of Current Account Deficit

From the Balance of Payments identity, we have that: $$ CAB+FI=\triangle RES $$ Or that, the current account deficit is financed by either capital inflows, or a change in reserves. My question is ...
1
vote
0answers
19 views

J Curve and DD Schedule in the Short Run (International Finance)

Assume that the J-curve is true. What would the DD curve look like during the early period of the J-curve (where the value effect dominates)? What would the effect of temporary changes in monetary ...
0
votes
0answers
18 views

Estimating parameters for model of specialization derived from Hecksher-Ohlin model of trade

I'm doing a dissertation on patterns of specialization, empirically testing the H-O model. It's only Master's level, so I'm afraid it's a bit derivative and basic. The backbone is to estimate ...
1
vote
0answers
15 views

gravity regressions with firm-level data

What are the problems of estimating gravity regressions with firm-level data or industry-level data rather than country-level data?
2
votes
0answers
18 views

How did old international loans work?

On June 11, 1782, John Adams secured a much needed loan for the new Republic from Holland. How exactly did this work in the days of strictly paper currency? What did it mean to loan internationally ...
5
votes
3answers
116 views

Buying locally vs abroad

I interested in the net effect of buying locally versus abroad. The UK Government wants to buy a ship. It can buy from a UK or Korean shipyard. The unit price is the same for both yards: £10. A ten ...
0
votes
1answer
53 views

Why do we say the US is in debt to China?

Apple import iPhones manufactured by factories in China. Apple has to pay for these Chinese manufacturers. So, Apple should be in debt with Chinese manufacturers. But why do we say the US government ...
0
votes
1answer
47 views

Does National Savings equal zero in a closed economy? Please give an economic intuition

Context: $Y -(C+I+G) = X - M$ In a closed economy, $(X-M) = 0$ Notations Y --> Income/Output C,I,G --> Consumption, Investment and Government expenditure respectively. X --> Exports M --> ...
0
votes
0answers
12 views

Is it correct to say that import tariffs are unilateral?

Is it correct to say that import tariffs are unilaterally decided by the nation or bloc applying the tariff?
1
vote
0answers
22 views

Is it true that the U.S has to run a chronic trade deficit with the rest of the world as a price to pay for being the world's reserve currency?

I have heard of the argument that in order for USD to be reserve currecy, the rest of the world must own enough USD to store it as reserves. In order for the rest of the world to own enough USD, U.S ...
0
votes
0answers
11 views

How is India able to maintain huge FOREX reserve despite large total current account deficit?

Countries with huge FOREX reserves generally also have huge current account surplus , for example - China has a FOREX reserve of over 3 trillion USD but it's CA surplus is also above of 150 billion ...
2
votes
0answers
21 views

Why does the EU need a clearing centre to circumvent US sanctions against Iran?

As reported here and elsewhere, the EU is considering the creation of a clearing house to keep trading with Iran despite US sanctions. Why is it not possible for the EU to conduct normal financial ...
1
vote
1answer
41 views

China - US Trade War: Holes in this analogy?

I have recently listened to a podcast by Peter Schiff concerning the China - US trade war. Schiff to me is an interesting chap; he always puts an interesting spin on things. However, from time to time ...
0
votes
0answers
21 views

How important is “second best optimum” for the modelling and formulation of policy advice?

The standard formulation of second best theory is: if there is introduced into a general equilibrium system a constraint which prevents the attainment of one of the Paretian conditions, the ...
0
votes
3answers
71 views

On trade, What justificaion does the USA have to accuse China of 'selling too much not buying enough from USA'

There's a trade war (dispute) going on between USA and China, and it boils down to the USA accusing China of not buying enough American products, relative to what they sell to America. Putting aside ...
0
votes
1answer
34 views

Is Iphone included in tariffs?

As the tariffs war getting escalating, I am curious about how the tariffs works on Iphone. Apple is an American company, and Iphone is its product. But manufactured by factory in China. Is there a ...
1
vote
2answers
58 views

How is currency depreciation related to import tariffs?

In the news today they were talking about how the US is "threatening to increase proposed tariffs on Chinese imports from 10 percent to 25 percent." One of the reasons they gave for this was that ...
0
votes
0answers
10 views

Is there an dollar estimate of the trade deficit change of the updated KORUS deal?

In March 2018, the Trump administration has struck its first updated trade deal, with South Korea. The list of trade barriers changed doesn't seem too expansive but it does include some potentially ...
0
votes
1answer
28 views

With whom does the US have the largest deficit using the trade in value-added (TiVA) methodology?

The US has the largest gross trade deficit with China. But some economists have argued that this is misleading, e.g. using the iPhone as an example in which most parts don't orginate in China. There'...
4
votes
1answer
124 views

The term “Most Favoured Nation” is misleading to me. Please explain

My understanding If Country A extends MFN status to Country B with reduced tariffs for a product, then it must treat all other nations in the same way. By this WTO encourages multilateral ...
1
vote
0answers
35 views

Is the trade deficit driven by lack of domestic savings?

NYU Prof Joseph Foudy said the US trade deficit was caused by a lack of domestic savings and that tariffs on China would just shift the deficit to other countries. Zacks says A country’s trade ...
0
votes
1answer
32 views

What can explain increasing exports after default episodes?

I am going through a paper on sovereign default by Mendoza and Yue (2012), in which defaults are explained in terms of how firms that use foreign intermediate inputs lose access to international ...
3
votes
2answers
65 views

What does the Leontief Inverse represent? (Intuitive Meaning or Real World Concept)

I encountered that nobody, even my profs and lecturers so far, has an intuitive way to explain what the Leontief inverse represents. Does somebody here? As most people here would know, it goes: $\ ...
0
votes
1answer
66 views

Do Chinese tariffs on American goods make them more expensive to American consumers?

This CNN article seems to imply that Chinese tariffs on American goods will make them more expensive to American consumers. Is this true? I did think that tariffs by your own country on imported ...
0
votes
0answers
19 views

Do USA branded product manufactured in china considered Chinese

We all know many USA branded products like Apple are manufactured in China. Are these products considered Chinese when they are imported back to US and may thus be subject to tariffs?
1
vote
2answers
68 views

Retaliating against a foreign country's import tariffs

When Trump imposes tariffs on imports from China, he is hurting American consumers who won't be able to take advantage of cheap Chinese goods. If China was to retaliate by imposing tariffs on imports ...
2
votes
1answer
47 views

Does Household final consumption Expenditure include Consumption expenditure of Imported Goods

From World Bank, I got the Household final consumption Expenditure for many countries across time. I wonder if this consumption includes Consumption expenditure of Imported Goods / Import Volume? If ...
0
votes
0answers
17 views

With adoption of CNH, will China stop buying US Treasury securities?

From what I've been reading, China's been using much of the USD it gets from selling exports, to buy US bonds. With China recently loosening its grip on the renminbi in order to make it an ...
0
votes
0answers
47 views

Balance of Payments for US Not Zero

I am following the lecture notes here http://coin.wne.uw.edu.pl/brokicki/wsp_images/oem___set_1.pdf which says balance of payments for a country, is zero CA + KA + FA + SD + RES = 0 The variables ...
2
votes
1answer
22 views

Effect of policies on Aggregate Demand.

Expenditure dampening policies may be used to correct a current account deficit. This involves contractionary monetary and fiscal policy. I understand that such measures induce a reduction in ...
2
votes
1answer
22 views

Where can I find data on bilateral trade?

Where can I find data on bilateral trade between countries in the world over time? I heard that only International Trade Center has access to this data, but I guess there's a public source. I tried ...
0
votes
0answers
30 views

What does China do with the USD it gets from its trade surplus?

The US has trade deficits with China amounting to several hundred billion dollars each and every year. This means annually there is several hundred billion USD flowing into Chinese hands. These ...
2
votes
1answer
24 views

Pascali (2015) Natural Experiment

In The Wind of Change: Maritime Technology, Trade and Economic Development (2015), Pascali estimates various effects on freight rates (i.e. the cost of transport) on outcomes such as trade volumes and ...
1
vote
1answer
17 views

Trade in services between the US and China

International trade consists of both goods and services, yet in the case of US-China trade for some reason both the media and official government releases only seem to quote the goods component. So ...
1
vote
2answers
438 views

Why are trade deficits considered unfair?

President Trump has accused Germany and China of unfair trading practices over trade deficits. What is unfair about trade deficits? This may be economics 101, but in my naive eyes every time a ...
-3
votes
1answer
37 views

Why do large financial institutions make international transactions in digital currency?

I've heard that blockchain technology has been used extensively by financial institutions when making international transactions to eachother, with speed and transparency and cryptographic security ...
4
votes
1answer
91 views

Heckscher-Ohlin with different technologies

Consider two countries: Home and Foreign that produce two goods, cars and wheat. The production technologies are such that: $q_{c} = K_{c}^{0.5} L_{c}^{0.5}$ and $q_{w} = 0.5 K_{w}^{0.5}L_{w}^{0.5}$ ...
0
votes
1answer
19 views

Import/export by sector/country data source

I am looking for import/exports data by sector and country, with partner countries. The goal is to get a picture of overall imports/exports to/from a specific country with (possibly) all of its ...
1
vote
1answer
17 views

Categorisation of Harmonised System codes for economic analysis

I work a lot with Harmonised System Codes (https://en.wikipedia.org/wiki/Harmonized_System). In a nutshell, the Harmonised System (HS) provides a way to record all goods based trade in and out of a ...
6
votes
2answers
101 views

Why is Algeria the #2 milk powder importer in the world?

Can anyone explain to me why Algeria, a country of 40 million people is importing almost half as much milk powder as China? Turkey has 80 million people yet it apparently doesn't import milk powder, ...
0
votes
1answer
35 views

Which currency do we consider when talking about trade balance ?

The Marshall Lerner condition and the J curve made sense until one day I noticed that to make sense of all of this , we considered two different currencies. I was told for e.g. in the short run, ...
0
votes
0answers
18 views

Ricardian Trade Model [duplicate]

This is an example taken from Krugman's book: Consider the case where the international relative price (of cloth in terms of wine) is $\frac{p_{c}}{p_{w}} = \frac{a_{lc}}{a_{lw}}$. Where $a_{lc}$ ...
0
votes
0answers
16 views

Is there any stock issued in foreign currencies?

We have international bond issued in different currencies (domestic and foreign). Do we have the same fact for stocks? for example, my company in Switzerland may issue some stocks in CHF, can I issue ...
0
votes
0answers
13 views

How will Trump’s tariffs affect North Korea?

How will Trump’s tariffs affect North Korea? Do tariffs mainly worsen the condition of the North Korean economy?
1
vote
0answers
17 views

When finding targets in a trade war, does the goods balance or trade balance matter more?

By most measures, most people who look at trade balance, but it might include a good chunk of services imports/exports who might not be as readily subjected to tariffs.
0
votes
1answer
267 views

Recession and Net Export

When a country's economy is currently in recession (or has entered a recession), will the net export increase or decrease? What will happen to the major trade partner's net export (will it be the ...
5
votes
0answers
42 views

Leontief's Paradox and the amount of capital

Leontief (1953) showed that US exports in 1947 embodied considerably less capital and somewhat more labor than would be required for domestic production of competitive imports. \$2.55 million worth of ...
1
vote
1answer
30 views

Terms definition in Balance of Payment

I have problems in distinguishing among terms in the Balance of Payment / the international balance sheet of a nation. As far as I know, on Assets and Liabilities sides of BPM, there are Portfolio ...
-1
votes
1answer
33 views

Economic impacts of Migration on the Labour Market

Many natives don't prefer foreigners taking their jobs, is it actually a bad thing for the countries economy?
2
votes
1answer
45 views

What type of protectionist measure is this?

I am currently studying an economics case study on protectionist measures but came across a measure which I have not heard off before, one which research has not shed any light on. The case study ...