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The World Economy: Trade And Finance

by: Yarbrough, Beth V.; Yarbrough, Robert M.

The World Economy: Trade And Finance

by: Yarbrough, Beth V.; Yarbrough, Robert M.

ISBN 13:
9780324203974
ISBN 10:
0324203977
Edition: 7th
Format: Hardcover
Copyright: 04/18/2005
Publisher: Cengage Learning

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Summary

The connection between international economics and your daily life is greater than you might think. THE WORLD ECONOMY: TRADE AND FINANCE is the most accurate, balanced, and user-friendly textbook available. And, at the end of every chapter you'll see at least three examples of how economic issues are impacting your life as a student and a citizen. Whether you need a great grade in the class or an economics textbook you'll use again and again, make THE WORLD ECONOMY: TRADE AND FINANCE your choice to help you succeed.

Introduction to the World Economy

(17)

Why Study International Economics?

(1)

What Do We Mean by International Interdependence?

(10)

Policy Implications of International Interdependence

(1)

Symptoms of International Interdependence

(5)

The Economic Significance of Political Boundaries

(1)

Studying International Economics

(5)

INTERNATIONAL MICROECONOMICS

Comparative Advantage I: Labor Productivity and Trade

(33)

Introduction

(1)

Early Thinking about Trade: The Mercantilists

(1)

The Decline of Mercantilism (and the Birth of Economics)

(1)

Keeping Things Simple: Some Assumptions

(1)

The Ricardian World without Trade

(5)

Production in Autarky

(2)

Consumption in Autarky

(2)

Equilibrium in Autarky

(1)

The Ricardian World with Trade

(9)

Adam Smith and Absolute Advantage

(1)

David Ricardo and Comparative Advantage

(3)

International Equilibrium with Trade

(4)

Who Gains, and by How Much?

(1)

The Gains from Trade: Exchange and Specialization

(2)

Gains from Exchange

(2)

Gains from Specialization

(1)

Using Demand and Supply to Analyze Trade

(14)

Demand and Supply in Autarky

(2)

Demand and Supply with Trade

(1)

Case One: Can the Ricardian Model Really Explain Trade?

(2)

Case Two: Does Labor Productivity Really Vary?

(1)

Case Three: Which Plants Export?

(6)

Appendix: What Can the World Produce? The World Production Possibilities Frontier

(2)

Comparative Advantage II: Factor Endowments and Trade

(30)

Introduction

(1)

The Neoclassical World without Trade

(8)

Production in Autarky

(7)

Equilibrium in Autarky

(1)

The Neoclassical World with Trade

(4)

Productive Specialization

(2)

International Equilibrium with Trade

(2)

Sources of Comparative Advantage

(17)

The Role of Factor Endowments

(2)

The Role of Tastes

(1)

Case One: Lights-Out Factories

(1)

Case Two: From Fish to Information Technology

(1)

Case Three: Socks: Made in USA

(1)

Case Four: Can Heckscher-Ohlin Explain China's Trade?

(5)

Appendix A: The Edgeworth Box

(4)

Appendix B: Offer Curves

(3)

Trade, Distribution, and Welfare

(29)

Introduction

(1)

How Do Output Prices Affect Factor Prices? The Stolper-Samuelson Theorem

(4)

How Do Factor Prices Vary Across Countries? The Factor Price Equalization Theorem

(7)

An Alternate View of Factor Price Equalization

(1)

Why Don't We Observe Full Factor Price Equalization?

(4)

What if Factors Are Immobile in the Short Run? The Specific-Factors Model

(5)

What Are the Reasons for Short-Run Factor Immobility?

(1)

Effects of Short-Run Factor Immobility

(2)

Trade with an Industry-Specific Factor

(2)

Trade and Welfare: Gainers, Losers, and Compensation

(13)

Potential versus Actual Utility

(1)

Comparing Utility: The Pareto Criterion

(1)

Comparing Utility: The Compensation Criterion

(1)

Adjustment Costs and Compensation in Practice: Trade Adjustment Assistance

(2)

Case One: Trade and Wages I: Asia

101

(1)

Case Two: Trade and Wages II: The United States

102

(2)

Case Three: Deja Vu: Learning from the History of the World Economy

104

(1)

Case Four: A Rare Opportunity: Learning from Japanese Economic History

104

(6)

Beyond Comparative Advantage: Empirical Evidence and New Trade Theories

110

(35)

Introduction

110

(1)

Questions to Be Answered

110

(1)

How Do We Know if a Theory about Trade Is Correct?

111

(1)

Testing the Heckscher-Ohlin Model

112

(3)

Early Tests

112

(1)

Fine-Tuning the Heckscher-Ohlin Model

113

(2)

Intra-Industry Trade

115

(5)

What Is It, and How Big Is It?

115

(2)

Intra-Industry Trade in Homogeneous Goods

117

(1)

Intra-Industry Trade in Differentiated Goods

118

(1)

Vertical Specialization, or Breaking Up the Production Chain

118

(1)

Why Does Intra-Industry Trade Matter?

119

(1)

Trade with Economies of Scale

120

(9)

Internal Economies of Scale

123

(2)

External Economies of Scale

125

(3)

Dynamic External Economies

128

(1)

The Scope of Economies and Learning

128

(1)

Technology-Based Theories of Trade: The Product Cycle

129

(2)

Overlapping Demands as a Basis for Trade

131

(2)

Transport Costs as a Determinant of Trade

133

(3)

Location of Industry

136

(9)

Case One: Trade and Sir Isaac Newton's Apples

137

(1)

Case Two: Are there Economies of Scale?

137

(2)

Case Three: Around the World in 22 Days

139

(6)

Tariffs

145

(35)

Introduction

145

(1)

Why Would a Country Impose a Tariff?

145

(2)

Types of Tariffs and Ways to Measure Them

147

(3)

What Happens When a Small Country Imposes an Import Tariff?

150

(6)

Effects on Production, Consumption, and Price

150

(2)

Effects on Welfare

152

(3)

Estimating the Effects of High U.S. Tariffs

155

(1)

What Happens When a Large Country Imposes an Import Tariff?

156

(4)

Effects on Production, Consumption, and Price

156

(3)

Optimal Tariffs and the Threat of Retaliation

159

(1)

How Does a Tariff Affect Factor Prices? Specific Factors and Stolper-Samuelson

160

(1)

Tariffs and Economies of Scale

160

(3)

The Effective Rate of Protection

163

(1)

Offshore Assembly Provisions

164

(1)

Taxing Exports

164

(16)

An Export Tax Imposed by a Small Country

164

(2)

An Export Tax Imposed by a Large Country

166

(2)

Case One: Making Cheap Medicine Expensive

168

(1)

Case Two: Binding Policy Makers' Hands

168

(2)

Case Three: China, Tariffs, and the WTO

170

(5)

Appendix A: Offer Curves and Tariffs

175

(3)

Appendix B: General-Equilibrium Tariff Effects in a Small Country

178

(2)

Nontariff Barriers

180

(32)

Introduction

180

(1)

Quotas

180

(3)

Comparison of Import Tariffs and Quotas

183

(1)

Export Quotas

184

(4)

Small-Country Case

186

(1)

Large-Country Case

186

(2)

Subsidies and Countervailing Duties

188

(7)

Export Subsidies

188

(5)

The Controversy over Export Subsidies

193

(1)

Trade-Relevant Production Subsidies

194

(1)

Dumping

195

(6)

Sporadic Dumping

196

(1)

Persistent Dumping

196

(2)

Predatory Dumping

198

(1)

Policy Responses to Dumping

199

(2)

Administrative and Technical Standards

201

(5)

Domestic-Content Requirements and Rules of Origin

202

(1)

Government-Procurement Policies

203

(2)

Technical, Administrative, and Regulatory Standards

205

(1)

How Can We Measure Nontariff Barriers?

206

(6)

Case One: Shooting Down the Byrd Amendment

207

(1)

Case Two: Cotton Pits Farmer versus Farmer

208

(4)

Arguments for Restricting Trade

212

(32)

Introduction

212

(1)

Categories of Arguments for Trade Restrictions

212

(1)

What about ``Infant'' Industries?

213

(4)

What If Markets Aren't Competitive?

217

(8)

The Optimal Tariff: Monopoly in a World Market

217

(1)

Protection and Monopolized Industries

218

(5)

Strategic Trade Policy

223

(2)

What If There Are Externalities?

225

(7)

Production Externalities

226

(2)

Consumption Externalities

228

(2)

International Trade and the Environment

230

(2)

Shouldn't the ``Playing Field'' Be Level?

232

(1)

How Can We Compete with Low-Wage Countries?

232

(1)

How Do We Handle National Security and Defense?

233

(1)

Aren't Goods and Money Better than Just Goods?

234

(1)

Can We Threaten Other Countries into Trade Liberalization?

235

(9)

Case One: Sticky Business in Singapore

237

(1)

Case Two: No, the Other Type of Dumping

237

(1)

Case Three: Spawning a Trade Dispute

238

(1)

Case Four: MITI Miracles?

239

(1)

Case Five: Science, or Politics?

240

(4)

The Political Economy of Trade Policy and Borders

244

(35)

Introduction

244

(1)

The Political Economy of National Trade Policy

245

(2)

How Did We Get Here? A Brief History of International Trade Policy

247

(9)

Before Smith, Ricardo, and Hume: Mercantilism

247

(1)

Britain and the Rise of the United States

248

(1)

The Reciprocal Trade Agreements Act of 1934

249

(1)

Post-World War II Trade Policy

250

(1)

Trade Policy in the 1960s and 1970s

251

(2)

Trade Policy in the 1980s and 1990s

253

(3)

Economic Integration and Regional Trading

256

(13)

Stages of Integration

257

(2)

Trade Creation and Trade Diversion: Integration and Welfare

259

(2)

Additional Considerations

261

(1)

Efforts at Integration: Success and Failure

262

(7)

Interregional Trade

269

(10)

The Role of Factor Mobility

270

(1)

The Role of Economic Policy

270

(2)

Case One: NAFTA Traffic Jams

272

(1)

Case Two: I.D. Cards for Avocados

273

(1)

Case Three: All in the Family

274

(1)

Case Four: Is Japan Being Left Out?

275

(4)

Growth, Immigration, and Multinationals

279

(46)

Introduction

279

(3)

Economic Growth I: More Inputs

282

(7)

More Labor and Capital

282

(3)

Just More Labor

285

(2)

Just More Capital

287

(1)

An Extreme Case: Immiserizing Growth

288

(1)

Economic Growth II: More Productivity

289

(3)

Types of Technical Progress

290

(1)

How Does Increased Productivity Affect Welfare?

291

(1)

What if Factors Can Move?

292

(33)

Inter-Country Labor Mobility

293

(8)

Inter-Country Capital Mobility

301

(7)

Taxation and Factor Mobility

308

(4)

Multinational Enterprises and the World Economy

312

(5)

Case One: Growth Myths and Miracles

317

(2)

Case Two: How Big Are They?

319

(1)

Case Three: Saving, Investment, and Intertemporal Trade

319

(1)

Case Four: Send Money

320

(5)

Development, Transition, and Trade

325

(45)

Introduction

325

(1)

Defining Development

326

(4)

Development Issues

330

(1)

Agriculture, Industry, or Both?

331

(6)

Views on Development, Circa 1950--1965

332

(1)

Import Substitution

332

(1)

As the World Learns: Changing Views on Development

333

(3)

Outward-Oriented Development

336

(1)

Lessons

336

(1)

North-South Issues

337

(14)

Agricultural Policy

337

(1)

Technology, Intellectual Property, and Development

338

(3)

Debts for Development

341

(8)

Economic Development and the Environment

349

(2)

Developing Markets: Economies in Transition

351

(19)

International Trade and Central Planning

352

(2)

The Painful Transition from Central Planning

354

(1)

The Reform Agenda and Prospects

355

(4)

Case One: Does Aid Aid Growth?

359

(1)

Case Two: Does Policy Matter? The Two Koreas

360

(2)

Case Three: Open to Development

362

(1)

Case Four: Reproducing Pharmaceuticals

363

(1)

Case Five: Oil Junkies?

364

(1)

Case Six: WTO Member or Market Economy?

365

(5)

INTERNATIONAL MACROECONOMICS

Currency Markets and Exchange Rates

370

(36)

Introduction

370

(1)

Exchange Rates and Prices

370

(2)

What Do Prices Tell Us?

370

(1)

How Can We Compare Prices in Different Currencies?

371

(1)

Foreign Exchange Markets

372

(7)

What Are They?

372

(3)

What Types of Transactions Happen in Foreign Exchange Markets?

375

(3)

Buying Currency Now for Delivery Later

378

(1)

Interest Parity

379

(7)

Uncovered Interest Parity

379

(3)

Covered Interest Parity

382

(2)

Does Interest Parity Hold?

384

(2)

Demand and Supply in the Foreign Exchange Market

386

(3)

The Demand for Foreign Exchange

386

(2)

The Supply of Foreign Exchange

388

(1)

How Are Exchange Rates Determined under a Flexible-Rate Regime?

389

(3)

How Are Exchange Rates Determined under a Fixed-Rate Regime?

392

(2)

The Effective Exchange Rate

394

(1)

Offshore Currency Markets

395

(11)

Case One: Multinationals-and Foreign Exchange

397

(2)

Case Two: Picking Stocks Means Picking Currencies

399

(1)

Case Three: Herstatt Risk

400

(1)

Case Four: Foreign Exchange Market Update

401

(5)

The Balance-of-Payments Accounts

406

(30)

Introduction

406

(2)

What's in the Balance-of-Payments Accounts?

408

(10)

What Goes in the Current Account?

408

(5)

What Goes in the Capital Account?

413

(1)

What Goes in the Official Settlements Balance?

414

(3)

How Double-Entry Bookkeeping Works: Some Illustrative Transactions

417

(1)

What Are Balance-of-Payments Surpluses and Deficits?

418

(2)

What's the Connection? The Balance of Payments and the Foreign Exchange Market

420

(16)

The Balance of Payments, Foreign Exchange Markets, and a Flexible Exchange Rate

422

(3)

The Balance of Payments, Foreign Exchange Markets, and a Fixed Exchange Rate

425

(2)

Case One: The U.S.--China Trade Deficit: $10 Billion or $40 Billion?

427

(1)

Case Two: The United States as a Debtor

428

(2)

Case Three: Rest of Galaxy Enjoys Current-Account Surplus

430

(1)

Case Four: World Merchandise Trade

430

(6)

The Market for Goods and Services in an Open Economy

436

(30)

Introduction

436

(1)

How Do We Measure a Country's Output?

437

(1)

What Determines Output and Income in an Open Economy?

438

(6)

How Does International Trade Affect the Market for Goods and Services?

444

(3)

A Note on Terminology

447

(1)

What Causes Changes in the Market for Goods and Services?

447

(7)

Fiscal Policy and the Spending Multiplier

448

(1)

Relative Prices of Domestic and Foreign Goods: The Real Exchange Rate

449

(4)

Interest Rates

453

(1)

Summary of Effects on Income and the Current Account

454

(1)

Interdependence: Protectionism, Income, and the Current Account

454

(1)

The ``Twin Deficits''

455

(2)

A Concise Graphical Summary: The IS Curve

457

(9)

Case One: Components of GDP

459

(1)

Case Two: The Peso and Mexico--U.S. Trade

460

(2)

Case Three: The Macroeconomics of German Unification

462

(4)

Money, the Banking System, and Foreign Exchange

466

(48)

Introduction

466

(1)

Money in the World Economy

466

(16)

What's Money?

466

(2)

The Demand for Money

468

(1)

Where Does Money Come From, and What Determines How Much There Is?

469

(7)

Money Market Equilibrium

476

(3)

A Concise Graphical Summary: The LM Curve

479

(3)

Money in Open versus Closed Economies

482

(1)

Banking Crises

482

(10)

How Important Are Banking Problems?

482

(1)

What Does It Mean for a Bank to Be ``Unsound''?

483

(1)

What Are Some Recipes for Banking-System Problems?

484

(5)

Why Do Banking Problems Spread?

489

(1)

Why Do Banks Matter So Much?

490

(2)

Foreign Exchange

492

(6)

Equilibrium in the Foreign Exchange Market, Again

492

(2)

Another Concise Graphical Summary: The BOP Curve

494

(4)

Bringing It All Together

498

(1)

How a Flexible Exchange Rate Regime Works

499

(3)

How a Fixed Exchange Rate Regime Works

502

(12)

Fixed Exchange Rates and the Nominal Money Stock

502

(3)

The Money Stock and Automatic Adjustment

505

(2)

Case One: Trying to Get the Best of Both Worlds

507

(1)

Case Two: Where the Foreign Exchange Reserves Are

508

(1)

Case Three: Birth of a Currency

509

(1)

Case Four: Banking on Unification

510

(4)

Short-Run Macroeconomic Policy under Fixed Exchange Rates

514

(191)

Introduction

514

(2)

Macroeconomic Goals in an Open Economy

516

(3)

Internal and External Balance

516

(2)

Targets and Instruments

518

(1)

Macroeconomic Policy with Immobile Capital

519

(8)

Fiscal Policy

521

(1)

Monetary Policy

522

(1)

Sterilization

523

(1)

Exchange Rate Policy with Immobile Capital

524

(2)

Summary of Policy Effects with Immobile Capital

526

(1)

Macroeconomic Policy with Perfectly Mobile Capital

527

(10)

Fiscal Policy

528

(1)

Monetary Policy

529

(5)

Exchange Rate Policy

534

(1)

Changes in Exchange Rate Expectations

534

(2)

Summary of Policy Effects with Perfectly Mobile Capital

536

(1)

Macroeconomic Policy with Imperfectly Mobile Capital

537

(2)

Fiscal Policy

537

(1)

Monetary Policy

537

(2)

Exchange Rate Policy

539

(1)

A Special Case: The Reserve-Currency Country

539

(135)

Case One: More on German Unification

542

(1)

Case Two: Betting Against the Baht

543

(1)

Case Three: Pesos and Tequila

544

(130)

Post-Bretton Woods, 1973--: Another Search for an International Monetary System

674

(8)

How's a Managed Float Supposed to Work?

674

(2)

What Are the Problems with a Managed Float?

676

(2)

How's the Macroeconomy Performed in the Post-Bretton Woods Years?

678

(4)

The Fixed-versus-Flexible Debate

682

(6)

Pros and Cons of Fixed Exchange Rates

683

(2)

Pros and Cons of Flexible Exchange Rates

685

(2)

Insulation from Economic Shocks

687

(1)

Money in the European Union: From EMS to EMU

688

(17)

History, 1979--1999

688

(2)

Maastricht and Monetary Unification

690

(5)

Who Should Use a Common Currency?

695

(2)

Case One: Mapping the Euro Zone

697

(1)

Case Two: Do Floating Rates Really Float?

697

(2)

Case Three: When Is a Central Bank Not a Central Bank?

699

(1)

Case Four: Is Growth Fixed or Flexible?

700

(1)

Case Five: Su Currency Es Mi Currency

700

(5)

Macroeconomics of Development and Transition

705

(32)

Introduction

705

(1)

Development and the Macroeconomy

706

(9)

Developing Countries' Pre-Reform Macroeconomic Characteristics

707

(3)

Reform

710

(4)

Lingering Risks

714

(1)

Transition and the Macroeconomy

715

(22)

Centrally Planned Economies' Pre-Reform Macroeconomic Characteristics

716

(3)

Reform

719

(9)

Transition Prospects

728

(2)

Case One: The HIPC Initiative

730

(2)

Case Two: Monetary-Policy Transition in China

732

(1)

Case Three: Ownership Matters

733

(4)

Country or Economy Index

737

(3)

Subject Index

740

Amazon no longer offers textbook rentals. We do!

The World Economy: Trade And Finance

The World Economy: Trade And Finance

9780324203974

0324203977

Summary

Table of Contents

Supplemental Materials

Write a Review

Amazon no longer offers textbook rentals. We do!

The World Economy: Trade And Finance

The World Economy: Trade And Finance

9780324203974

0324203977

Summary

Table of Contents

Supplemental Materials

Write a Review

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