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 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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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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How does a bank convert one currency to another?

Say for example I sell ZAR and buy USD. What happens behind the scenes so that the local ZAR bank is able to deposit USD into my account? Does the bank require some sort of USD cash reserve? How do ...
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According to the U.S., what constitutes as fair subsidies?

The U.S. asked China to do this during the trade negotiations: China immediately will cease providing market-distorting subsidies and other types of government support that can contribute to the ...
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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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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 ...
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Are there economic models that predict (only) a medium/long-term negative effect of protectionism?

Going by some ECB models/estimates from last year, protectionism would result in negative consequences pretty fast, e.g. For illustration, I will use the results of simulations carried out by ECB ...
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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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Are there internationally published sources of trade sanctions?

How to implement embargoes with respect to a trading company? Let's assume i am a small trading agent which assists and guides small exporters and importers while keeping embargoes and light ...
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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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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 ...
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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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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 ...
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why doesn't every country scale up the prices to the international level?

I live in an Asian country in which the average monthly salary is maybe 300-400 dollars but things (apart from exported goods like laptops or smartphones) are reasonably cheap compared to their price ...
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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 ...
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Do sanctions work?

When countries commit "economic crimes" — i.e., theft of intellectual property, dumping, currency manipulation — are sanctions effective at making them stop? I am specifically looking for examples of ...
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Heckscher-Ohlin trade model with non-homothetic preferences

$U^j = \prod^N_i \left(d^j_i-\bar{d}_i\right)^\oint$ where $d^j_i$ is the per capita consumption of good $i$ in any country $j$; $\bar{d}_i \geq 0$ denotes the minimum consumption of each good $i$, ...
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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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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 ...
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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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Russian ruble drop in value due to low oil prices

http://www.americanactionforum.org/research/impact-falling-oil-prices-russian-financing/ Based on the above article, the author states that "For budgeting, this favors the oil exporter, because a ...
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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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How is it possible that shipping of eBay items from China to US is 'free'?

How is it possible that Chinese vendors are able to ship a small / light $3 part to a doorstep in the US for free? When shipping items the opposite way via USPS it is often greater than the cost of ...
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Germany's current account surpluses: Negative effect? How to solve them?

The case for a pernicious persistent current account deficit is easy to build: the home country is borrowing abroad for a long period and that debt may reach a point of becoming unsustainable. There ...
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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, ...
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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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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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Does China subsidize its exports?

And if so, to what extent? Also, how does the extent of China's subsidies compare internationally? (I understand this is a broad question but I can imagine that some economists somewhere have come ...
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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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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'...
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Which institution (government or private) provides the complete data on HS (Harmonized System Code), tariff schedules for India, China and US?

Was looking out for options on building a data store having HS code and tariff schedule data for few countries, which I can use as a base for import calculations and general HS lookup. Is there a ...
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Inflation leads to loss of gold reserves

I am reading Murray's Rothbard What has government done to our money? and this is his reasoning for inflation leading to loss of gold reserves to other countries (...
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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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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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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 does a country devalue its currency?

I recently read an article in the New York Times that talked about China devaluing its currency (which I believe is held to a peg against the US Dollar). My question is: specifically what tools does a ...
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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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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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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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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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Whats the math behind calculating the price of cryptocurrency through supply and demand?

"The value of currencies (including most popular cryptocurrencies) is set by a market. Price rises or falls until the supply and demand of the currency are equalized" Why exchange rates of national ...
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Why is trade deficit a good thing?

In general most economist agree that deficit is not a negative thing, but I have trouble understanding why For example if country A has 10\$ and country A runs trade deficit to B of 2\$ per year, ...
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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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