All Questions
Tagged with macroeconomics international-trade
92 questions
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25
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is there any specific way to convert a country's gdp to us dollars?
I need to convert Indonesia's real/constant GDP(rupiah) base year 2010 to USD. is it like basic convert using exchange rate based on the year I look for? or is there other way?
I am concerned with the ...
0
votes
1
answer
42
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Import proportionality assumption in input-output tables
I'm struggling to get the meaning of the assumption underlying the construction of the input-output tables, that is, the proportionality assumption. I read:
When materials offshoring is measured by ...
- 430
1
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0
answers
29
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Current Account deficit but FX appreciating?
When the Current Account (CA) is in deficit it means there is less demand for a currency than supply so it should theoretically depreciate but sometimes this does not hold. When a country with CA ...
1
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2
answers
90
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Surplus in the Financial Account - BoP
As a student I am trying to understand the BoP dynamics resulting from a net inflow in the financial account (FA) of a country.
Assuming a country has a Current Account (CA) deficit of -50.
CASE1: if ...
1
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1
answer
148
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Deriving Unit cost function
Unit cost function is the minimum cost to produce one unit of output.
The solution to the above problem is:
where ai(w,r) is the amount of labour needed to produce 1 unit of good i at factor prices (...
- 41
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1
answer
702
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Increasing Returns to Scale and Perfect Competition
Increasing returns to scale due to internal economies are incompatible with perfect competition BUT increasing returns to scale due to external economies are compatible with perfect competition
SOURCE:...
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0
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38
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Why was the USD rangebound between 1987 and 1995 from an economic standpoint?
I'm trying to understand what caused this long period of range boundedness for the USD index from 1987-1995 from an economic standpoint.
From my understanding. In 1985 the USD had reached it's ...
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1
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1
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69
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Could Foreign Exchange rates fluctuate under a Gold Standard system?
I recently read an article where it said that during the gold standard, right before world war 1, 1 GBP went from equaling \$4.87 to soaring up to \$6.75 . My understanding always was that Forex rates ...
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1
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103
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Is John Maynard Keynes an economic liberal or an economic nationalist?
I am working on a research project about political economy. However, I stumbled upon differences in the interpretation of the orientation of John Maynard Keynes. Some sources indicate that Keynes is a ...
1
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1
answer
325
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BOP balancing to 0, use of capital and financial account
Please someone for the love of god help me. I can't find two sources on the internet that don't have conflicting or very difficult to understand information on the balance of payments.
I have various ...
0
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0
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23
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How does breaking away from a larger nation effect the economy
I am working on making a fictional world, and I really want to make the economics realistic, so I decided to come here to ask questions. The context is that a large nation went through a large civil ...
- 111
2
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0
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99
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Interpretation of the Elements of the Leontief Inverse (Total Requirements Matrix)
I found what I believe to be slightly different interetations of the individual elements of the Leontief Inverse (total requirements matrix):
Miller and Blair (2009) just after Equation (2.12) mention ...
- 121
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1
answer
32
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How to get Customs data for importing companies?
I am looking for customs data for importing companies for each country.
I found some of them, for instance Canadian Importers Database
But I wonder if any of you know the additional free sources. ...
- 11
1
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0
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11
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Calculating home bias in trade
I want to make a simple estimation of home bias in trade within the EU countries by using
aggregated data from CEPII dataset
Link: http://www.cepii.fr/CEPII/en/bdd_modele/bdd_modele_item.asp?id=8
I ...
- 31
2
votes
1
answer
75
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Will business optimism in Ghana appreciate / depreciates Ghana's currency?
Text from the image:
One of Ghana’s top trading partners is India. The currency in Ghana is the cedi and the currency in India is the rupee.
Which of the following is a likely consequence of an ...
- 225
2
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1
answer
236
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The gold standard and trade imbalances
I’ve recently come across a paper which states that trade imbalances during the gold standard caused outflows/inflows of gold from the country running the trade surplus/deficit thus securing balanced ...
- 187
1
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1
answer
141
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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 ...
- 187
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0
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72
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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 ...
- 121
2
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1
answer
177
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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 ...
- 127
0
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1
answer
39
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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 ...
- 105
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1
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42
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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 ...
- 111
2
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0
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89
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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) ...
- 21
2
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1
answer
174
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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 ...
- 1,135
2
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1
answer
62
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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?
0
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1
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28
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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?
0
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2
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305
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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 ...
- 1,135
0
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2
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219
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 ...
- 1,135
0
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2
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135
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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 ...
- 1,135
2
votes
1
answer
97
views
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 ...
- 1,302
2
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1
answer
63
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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 ...
- 1,135
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0
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33
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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, ...
0
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2
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56
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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 ...
- 400
10
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1
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211
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Causes of trade deficit: Multiple views
I am trying to understand the causes and macroeconomic implications of running a trade deficit in the United States, and I came across a few different views on this topic. I'd like to know if there ...
- 153
1
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0
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63
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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 ...
-2
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1
answer
54
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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.
- 743
1
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1
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184
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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 ...
2
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1
answer
23
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International emissions trading
As far as I have understood emission right certificates are some kind of currency. Each company may emit as much of say CO2 as its certificates allow. Certificates may be traded, i.e. bought and sold. ...
1
vote
1
answer
43
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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 ...
- 583
1
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1
answer
517
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How do imports affect GDP?
Let's say the U.S. imports a brand new Ferrari that costs $600,000. I know that it would take away from the U.S. GDP since it's considered an import. However, if a consumer buys that Ferrari from the ...
- 33
1
vote
1
answer
913
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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 ...
- 131
0
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2
answers
316
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Bond prices and Trade deficit
Why does the narrowing of trade deficit cause an increase in bond prices?
I do understand that narrowing of trade deficit leads to narrowing of capital account surplus. Also, investor confidence ...
- 81
0
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1
answer
216
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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
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1
answer
2k
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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 --> ...
- 440
3
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2
answers
170
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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 ...
- 1,101
0
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4
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145
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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 ...
4
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1
answer
188
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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 ...
- 143
1
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1
answer
48
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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 ...
- 125
3
votes
3
answers
3k
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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:
$\ ...
- 43
1
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2
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215
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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 ...
- 289
2
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1
answer
240
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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 ...
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