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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149 views

How is trade in services conducted under the WTO in the absence of the Doha conclusion?

The Doha round of negotiations for the WTO had a focus on services, but that round has not been concluded. Does that mean that trade in services between trading partners without a preferential trade ...
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Discrepancy of GDP and International Transaction Releases for Exports

The Bureau of Economic Analysis ("BEA") provides consolidated data from several different government agencies. Currently they provide exports under both a Gross Domestic Product ("GDP") release as ...
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Would PPP adjustments between countries be irrelevant if all countries had the same relative prices?

I'm trying to understand the relationship, if any, between the fact that countries have different relative prices (e.g. different 'food price-to-general consumer prices' ratios) impacts the need for ...
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Theory of Optimal Currency Areas

Should a country be more inclined or less inclined to join a currency union (common currency) under the following events: a) Increase in the size and frequency of AD shocks to the economy. b) Increase ...
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170 views

GDP per capita and trade relationship

There's a lot of literature describing the relationship between growth and trade, but I'm not sure what conclusions I can draw from GDP per capita (specifically) and trade in one particular year for ...
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108 views

What international payment systems do exist?

I recently read up on the Society for Worldwide Interbank Financial Telecommunication (SWIFT). As faar as I understood it was up until recently the only provider of a system to exchange money ...
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25 views

Where can I find a complete list of goods affected by NAFTA?

I am looking for the list of goods that NAFTA, preferably in the format of what is subject to tariff reduction. I have found a few potential leads, but none seem to be exhaustive: https://www....
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171 views

How can the “Share of merchandise imports at current PPPs” be negative?

I'm looking at the Penn World Table 9.0 data, and find that the "Share of merchandise imports at current PPPs" (csh_m) can be negative. For example, ...
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97 views

“Increasing trade barriers causes a country’s currency to appreciate”?

Mishkin (2016, p. 476) writes: Barriers to free trade such as tariffs (taxes on imported goods) and quotas (restrictions on the quantity of foreign goods that can be imported) can affect the ...
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104 views

Question about tariffs in Henry Hazlitt's Economics in One lesson

I've been reading Henry Hazlitt's Economics in One Lesson and he said something about free trade and tariffs that I don't quite understand. He uses the example of buying cheaper English sweaters ...
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1answer
44 views

Is an EU single currency still a trade advantage in 2019?

When the single currency was planned, there was no internet and there all currency exchange was manual. Today the web can automatically convert prices using multiplication of the numbers in the ...
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Is Universal Basic Income compatible with free international trade?

If one country introduces UBI, what prevents other countries from taking advantage of that and supplying cheaper (no need to finance a UBI scheme!) goods to the original country and outcompeting the ...
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1answer
28 views

What are some of the barriers to trading services?

As I understand it countries negotiate free trade agreements in services using the WTO GATS. But what are some of the barriers to the transnational exchange of services that an FTA would seek to ...
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358 views

What percentage of UK imports/exports were with the EU in the economic year 2015-2016?

With the referendum over whether or not the UK should leave the EU or not I am interested to know what percentage of UK trade is made up of trade within the EU (Imports & exports). I am aware ...
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45 views

If regional subsidiaries bypass trade restrictions, why are FTAs needed?

One of the ways corporations trade transnationally in the face of local restrictions on market access is to set up subsidiary companies or regional offices from which trade is conducted. If such ...
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24 views

Are trade deficits good/bad or neither?

Is there an academic consensus on whether a trade deficit is good/bad or neither? And if that country is in a monetary union, does the answer change because the wealth moved out of the country can be ...
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What arguments are there in favor of national food self-sufficiency?

National food self-sufficiency is an idea that appeals to many non-economists. For example, George W. Bush (2001): It’s important for our Nation to be able to grow foodstuffs to feed our people. Can ...
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1answer
34 views

Are services included in the calculation of a trade deficit?

Are services included in the calculation of a trade deficit? Presumably measuring service exports is more difficult/less accurate(?) than for goods?
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177 views

What does an increase in REER signify?

What does an increase in the real effective exchange rate signify? I read from a news report that (localized for India): Furthermore, REER is calculated in such a way that an increase in its ...
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What are some famous examples of infant industries that failed?

The Japanese and Korean car and steel industries are often touted as examples of successful infant industries. I'm trying to find some famous examples of failed infant industries. (They don't seem ...
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Does the WTO have a mechanism to accommodate states transitioning trade regimes?

If the UK were to leave the EU without a Withdrawal Agreement in place it defaults to WTO trading terms. Does the WTO have a mechanism to accommodate such a transition?
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What's a good textbook on International Trade?

My professor for Int. Trade insists on using his unfinished notes as a basis for the class, so I'm looking for an alternative. The syllabus goes as follows: Gains from trade Free trade equilibrium ...
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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 ...
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1answer
76 views

What is the relation between the trade deficit and the outsourcing of jobs?

To make it easier, let's imagine USA exports nothing and imports nothing (or the exports have the same value with the imports = 0 trade deficit = the country exports the same amount of jobs as it is ...
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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 ...
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Determining the Relative Price of Trade

I'm pretty sound with the concept behind comparative advantage, but still don't get how to calculate the exchange rate in terms of quantities of each products being exchanged, e.g. 1 apple for 2 cars ...
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40 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 ...
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51 views

Do free-trade agreements typically include clauses relating to services?

Do free-trade agreements typically include clauses relating to services? For example, reciprocal recognition of professional qualifications.
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1answer
51 views

HHI and concentration [closed]

I calculated the HHI index for Chile exports and got values ranging from 0.09 and 0.13. We know that Chilean exports are very concentrated (around 40% of the exports are copper related goods) and the ...
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1answer
44 views

Are US-branded products manufactured in China considered Chinese?

Many US-branded products like Apple's are manufactured in China. Are these products considered Chinese when they are imported back to US? And are they thus subject to tariffs?
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1answer
69 views

IS-LM , Eurozone and Interest Rate Parity

In the IS-LM framework, when the CB expands Money supply, interest rates are driven down, investment is boosted, and aggregate output increases (shift of LM curve, movement along IS curve). In the ...
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1answer
17 views

Paying for imports

In an open economy, a country can either pay for imports by running down its reserves, or by financial inflows. The payment for imports via reserves is easy to understand- an importer can go exchange ...
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1answer
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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 ...
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1answer
531 views

Basic question on trade based on comparative advantage

The following question is taken from Economics: Principles and Applications 6th Edition, by Hall and Lieberman. This question about applying the theory of comparative advantage between a ...
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129 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 ...
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Who performs the checks for regulatory compliance at trade borders? [closed]

Customs officers check for tax compliance at trade borders. But who performs the checks for regulatory compliance at trade borders? Is it simply the various Government ministries (eg the one ...
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135 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 ...
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12k views

Why does the Balance of Payments have to (more or less) equal zero

It seems to me that the non-reversible transactions included in the current account, and the reversible transactions included in the capital and financial account, are unrelated, and should therefore ...
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118 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 ...
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215 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 ...
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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?
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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 ...
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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 ...
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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 --> ...
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40 views

Differences between international and national creditors

When considering a nations debt, how does it affect the nation whether its debt is held by national or international creditors? If there is preference does this translate into different prices for the ...
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711 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 ...
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641 views

What are the factors that drive openness in developed vs developing countries

My questions are: What are the factors (both positive and negative) that drive openness in a country? Do they differ between developed (e.g USA) and developing (e.g China) countries? Will these ...
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1answer
164 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 ...
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2answers
336 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: $\ ...
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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 ...