Econ 441
Terms
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- Leontief paradox
- , greatest piece of evidencea gainsed factor-proportions theory, shows the United States exporting more labor intensive goods than capital intensive.
- Factor Price Equalization
- as trade causes prices of goods to converge between countries, this causes the relative prieces of factors to converge also.
- intertemporal trade
- term given for the type of trade that results from financial transactions. It differs because it is trade for a goods today for goods in the future.
- internalization
- why is production in different locations done by the same firm?? tech transfer?
- vertical manufactures
- all parts and goods produced by one firm, reduces horizontal problems
- demand supply relationship
- Home Demand - Home Supply = Foriegn supply - foreign demand
- CEU
- complete economic union
- effects from old regionalism
-
trade creation
diversion
modification
TOT external and internal - price settign
-
mr = mc monopoly
p = mc - Duopoly Cournot
- how much to sell: BRF
- Duopoly Nash
- what price to set: becomes competetive
- market share maitenence
- each sells 50%, stays two monopolies
- Stolpher Samuelson
- An increase in the price of "labor good" will raise the wages relative to the rent and capital's income.
- Rybczynski
- increase in a factor endowment will increase by a greater proportion the output of the good that uses that factor and reduce the other.
- income
- = wage x labor + rent x capital
- Q
- q = P(1+t)
- govt revenue
- R = t PM
- relation x , m , p
- pM = X
- Tarrifs equ
- t = (q - P)/P
-
g=1
g=0
g=m -
g = 0 ultraprotect
g = 1 saddam
g = m neutral - metzler paradox
- if export is elastic, the price will fall as a result of tariff
- net investment position
- how much borrowing form the world overall
- current accounts equ
-
C = x - pM + E
C = -F
E = dividend payments - Financial accounts
- assets sold - assets bought
- why multinational
-
1) ownership advantage - widget patent
2) locational advangtage = must be a reason to produce elsewhere
3) internalization: keep inside, avoid losing tech advantage - new regionalism 5
-
DC/LDC (NAFTA)
LDC's are reformers (communism for mkt)
Moderate Liberalization
Deep Integration
Asymmetrical small - trends of trade
- Multiliberalization, Fundamental reforms in E&S, more FDI
- timeline 4
-
1) Inside price multilateral policies
special interest groups sacrificed for benefits from trade
2) insides negotiate
outsides go to autarky
3) implement liberalization - expands multiliberalization
outside reevaulate
4) outside choose reform
outside compete for FDI, regionalism is important - TOT
- pm/px