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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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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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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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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43 views

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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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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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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120 views

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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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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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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Volume of trade covered by regional trade agreements

Is anyone aware of statistics about the total volume of trade that happens under regional trade agreements (RTAs)? It's easy to find figures for the number of agreements, but not so easy for their ...
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Where does overseas money from exports go?

I am a bit confused about foreign exchange reserves. I was reading this website (https://www.thebalance.com/foreign-exchange-reserves-3306258#targetText=Foreign%20exchange%20reserves%20are%20the,to%...
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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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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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(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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Balance of Trade - Currency devaluation in a price taker economy

How will a real exchange rate devaluation affect Balance of Trade, if an economy is a price taker in world markets for both export and import?
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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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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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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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A valid argument against free trade?

Recently I read Bertrand Russell's Political Ideals (1917). Although he expresses strong left-wing ideals there, he supports free trade and criticizes protectionism. It seems that not any left-wing ...
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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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226 views

How does a budget deficit help grow a trade deficit?

What are the mechanism that explains this, and does this help explain the U.S.-China trade deficits?
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55 views

Who paid the bill for cheap Chinese exports?

We have all enjoyed the flow of cheap Chinese imported goods, whether in the shops, or online. The shipping costs from China have always seemed very low. Now I see this note: Got notification today ...
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Effects of tariffs on company

How would Trump's tariffs affect an American multinational company? Would the goods that they produce be considered imports?
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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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Papers on International Trade and Environment

everyone. As a requirement to get my bachelor's in economics, I have to write a paper. The theme I picked is something along the lines of "the impact of environmental crimes and regulation on ...
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90 views

Derivation of aggregate demand function for Monopolistic Competition (based on Combes et. al, 2008)

A specialized question for those, who excel in monopolistic competition and modern trade theories. I am interested in a derivation of an aggregate demand function for a model of monopolistic ...
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90 views

World economy and world trade

What is the difference between the world economy and world trade? I have read in one book saying "US share in the world economy is 28% and in the world trade is 15%" (2008 edition though). Please ...
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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?
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Why a Current Account deficit implies a Financial Account surplus [duplicate]

Every macro textbook out there states that if a country has a Current Account deficit, it must have a surplus in the Financial account, but I have not heard a convincing explanation. Imagine a ...
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Why are imports subtracted from GDP?

GDP is a measure of a country's production. $$GDP = C + I + G + X_n$$ $C$ = Consumer Consumption $I$ = Gross Investment $G$ = Government Expenditures $X_n$ = Exports - Imports Exports are what we ...
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Chinese tarriffs (pre-tradewar)

I am trying to understand to what degree tariffs (or other restrictions like quotas) were the cause of the trade imbalances between the US and China. One might imagine that it was simply a matter of ...
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Why does capital flight cause inflation?

Context: I was watching a video about Venezuela, and, it all started with capital flight due to poor confidence in the government. The government tried to stop it, and in the process it created a ...
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Why did no US politician start the trade war a decade earlier with China or possibly the Globe if it is a good thing to do? [closed]

Why did no US politician start the trade war with China (or possibly the Globe) a decade earlier if it is a good thing to do? I am asking for a list of reasons for why not.
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Is the European Single Market a Free Trade Area?

The European Single Market is (obviously) a Single Market. Are Single Markets also free trade areas?
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Can tariffs be said to subsidise domestic industry?

If a state places a tariff on a good, domestic manufacturers of that good become more price-competitive in the domestic market at the expense of overseas suppliers. Could this be said to be a policy ...

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