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 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 ...
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When a country is banned from using SWIFT, what alternative ways do banks within that country still have to transfer or receive money from abroad?

If Russia invades Ukraine one of the sanctions that the west might impose is banning the banks in Russia from the SWIFT network. I've watched a short video from a financial news channel that explains ...
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What is the impact of falling inflation on the UK Economy ? URGENT [closed]

What is the impact of falling inflation on the UK Economy ? URGENT What is the impact of falling inflation on the UK Economy ? URGENT What is the impact of falling inflation on the UK Economy ? URGENT ...
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How is North Korea paying for all its imports?

As far back as the 1980s it seems that North Korea has imported more than it exported. Given that they weren’t exactly a wealthy country back then, and as most countries stopped debt financing ...
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Why should a country waste its labor making things that can be produced more efficiently abroad, what differernce would it make to its economy

I am actually new to the field of economics, so i took up this book called "How an economy grows and why it crashes" - Peter D Schiff. So I understand he has got a differnet perspective ...
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Nominal vs Real value of a currency

I was wondering what is usually the relationship between the nominal value, NEER, and the real value of a currency REER? And how to interpret the REER of a currency, >100 overvalued < 100 ...
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Is there any situations where real exchange rate positively impacts on national imports?

I'm working on a gravity model analysing the factors that affect national imports, and the results showed that the real exchange rate (real exchange rate between local currency and foreign currency) ...
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Balance of payment-current account deficit needs capital&financial account surplus

I am searching for the reason why does current account deficits requires a capital&financial account surplus and all that I've found out is something like, If US import much more goods and ...
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Mathematical proof of dynamic stability of equilibrium in international trade, with quantity adjustment

I am studying dynamic stability of neoclassical international equilibrium given in Giancarlo Gandolfo Economic Dynamics, but I am failing to understand an intermediate step, namely linearization of ...
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In a box diagram, why does efficiency locus lie on one side of the diagonal, if both sectors haves constant returns to scale function?

The following is what I understand, so far. If we measure labour in the $x$-axis and capital in the $y$-axis, the slope of diagonal of the box is the capital-labour ratio $K/L$ in the economy. Let $A$ ...
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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 ...
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The Equilibrium Wage in Ricardian Trade Model

I am learning the Ricardian trade model by reading Eaton & Kortum 2012 JEP. The equilibrium is easy to understand when there are finite goods, as shown in their Figure 1. However, they then ...
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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 ...
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Why is there such a big difference of purchasing power toward Coca-Cola between Euro in France and USD in USA, comparing to Big-Mac?

I have an assignment that requires me to pick an item and use it to create my own price level index, similar to Big-Mac index. In March 2021, the price of 0.5 litre Coca-Cola in France was 0.97 Euro ...
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Foreign direct investment data

Does anyone know where to get free cross country, country to country foreign direct investment and production chains data for a cross section analysis? I ve looked at the world Bank database, couldn'...
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Statistics on Mexican illicit drug exports by country?

Estimates of the size of the total Mexican illicit drug export markets are somewhere around USD 200-650 billion per annum, depending on the source: \$426-652 billion per year \$500 billion \$200-300 ...
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National Production/Consumption Data

I've found https://comtrade.un.org/ for country-to-country product import/export data. Is there an equivalent data set for self-consumption, ideally harmonized with the UN's H6 classification system? ...
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Are there intermodal tramp freight carriers?

I'm working on a fictional system where shippers -- companies with bulk goods to ship -- post contracts stating an origin, destination, and number of cargo containers. Carriers -- whether by air, land ...
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IS-LM : monetary policy in SOE that exports inferior goods

If I follow the IS-LM model (or some derivative of it), a small open economy can really only use monetary policy to change GDP in the short term. According to the model (or one of its spin-offs), if ...
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How many million metric tonnes of cocoa butter were produced in 2020?

I'm doing some research on global ingredient production. I'm having trouble finding estimates on global cocoa butter production in 2020. Here's the problem: Statistics on how much cocoa is produced ...
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What are some negative/positive aspects from globalization in regard to developed countries?

I have read many articles on how globalization is helping developing countries, as more and more companies from developed countries have been moving their production oversees. However, as hard as I ...
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India's exports and the rupee

There are several analyst asserting that a strong rupee would dampen India's exports, for example below article. Given that circa 80% of indian exports are invoiced in USD, why a strong local currency ...
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Krugman 1980 AER, Deriving Equation 14

I have been trying to derive equation 14 from Paul Krugman's 1980 AER paper. I keep getting a different result, and further, I find that equation 14 from the paper does not balance payments when I ...
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How has the Chinese freight industry developed during last year?

The last year has been filled with so many unfamiliar circumstances such as Covid-19, and now with the rising tensions as well, I'm wondering how the Chinese freight industry is developing during ...
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Proximity-concentration hypothesis: homogeneous firms and symmetric countries

Hi everyone I am running into a stone wall and don't seem to be able to solve this, can someone show me the steps how I can insert 1 into 2 and get 3. $B=\frac{f_E+f_D}{φ^{(σ−1)}*(1+τ^{(1-σ)})}$ $π =...
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Does a high current account deficit devalue the national currency?

I've been reading some materials about Belarus's 2011 financial crisis, and a common thread among them is this: Belarus had had a rapidly growing current account deficit, and in 2011 it came to a head ...
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Is it an international norm to have excise or tariff to be balanced or reversed when exporting goods?

It's an accepted international norm to charge VAT on import and rebate VAT on export, such that goods from different countries can be competed on a level playing field. However, is it the same with ...
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Why has China's integration into the global economy caused it to slow it's output?

In the following passage, what does it mean to be integrated into the economy and why does this mean that now China and India are integrated into the economy that their output has slowed down? In the ...
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Equities-dollar correlation

Equities-dollar correlation was mostly positive in the 2000s and switched to negative since the GFC. Are there any structural drivers explaining this change in correlation?
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Can I add a variable that varies only with time in Least Squares Regression model with a time-fixed effects term?

I'm estimating this equation for the trade flows between various countries at time t: ($i$ and $j$ are countries) The last 3 terms are control variables, one of which is oil prices. Can I add oil ...
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Why would foreign asset purchases by PBOC temper yuan appreciation?

Suppose the PBOC buys a bunch of dollar-denominated bonds, using its dollar reserves. All else equal, what effect should this have on the yuan-USD exchange rate? And why? It amounts to trading non-...
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Are financial markets "unique" for each "currency pair", or are they simply "translated"?

This is something I've been long wondering about. Let's say that I have statistics showing the daily closing Bitcoin price in USD since early 2009. Great. Now, if I wanted to get the daily closing ...
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Creating a pragmatic, useable (not theory heavy) proxy for a currency basket for a set of economies

This is currently, a gedanken experiment, but may well form the basis of a whitepaper - or better still, an actual project. I am trying to come up with a practical way of creating a "currency ...
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Where in the BOP does the rental of a building appear?

Say a Japanese citizen (living and working in Japan) owns a house in the US and rents it out (to a US resident) for \$10,000 in 2020. (Assume the value of the land is negligible.) Where in the US BOP ...
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Why would a digital Yuan (or some other national currency turned into a CBDC) "help fast-track international settlements" in that currency?

I'm trying to understand the basis of this claim As the main mode of transaction in the world's second biggest economy, China's currency should be a natural contender for the spot. However, the U.S. ...
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Does trade between countries tend towards a state of only containing monopolies as a result of comparative advantage?

I've recently been reading Mankiw's Microeconomics 8th edition. In there he raises the idea of comparative advantage and points out how if we have two participants in an economy who both produce ...
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Does the WTO monitor the trade of players in association football? Could they?

So I understand the WTO is able to settle trade disputes. If the German Bundesliga said English players had a 1% luxury fee that went towards operation costs (A \$100,000 transfer would cost \$101,000,...
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Why are anti-dumping duties considered to be non-tariff barriers to trade?

English is not my first language so sorry in advance! please help me on this one I can't find a good answer, and until I have understood this one, I won't get the whole non-tariff barriers to trade ...
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GDP of domestic and foreign economic activities of a country

Is there an indicator which shows how much GDP of a country is generated by domestic economic activities (e.g. business between food production in Germany and agriculture in Germany) and how much GDP ...
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Does comparative advantage maximize revenue?

I am reading Lovell's "Economics with calculus", where in Chapter 2, he presents Ricardo's Theory of Comparative Advantage, and states how in a simple model two countries benefit from free ...
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Can individual consumers ever be price-makers, and can they thereby have major effects on welfare?

Suppose there's a big demand shock on some good X. As long as X has fairly standard supply and demand curves, that'll raise the price. And all of the buyers who would have bought at the lower price ...
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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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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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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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