名词解释英文国际经济学

名词解释英文国际经济学

Absolute Advantage：the greater efficiency that one nation may have over another in the production of a commodity.

Comparative Advantage:A country has a comparative advantage in producing a goods if the opportunity cost of producing that goods in terms of other goods is lower in that country than it is in other countries.

The terms of trade is the relative price at which two countries trade goods. Terms of trade =export price index/ import price index

Small Country Effect

If a small nation trade with a very large nation according to its comparative advantage, the small nation can achieve complete labor specialization in production, and the large nation can not. The terms of trade must be the relative price of the large nation in autarky. Because the small nat ion is very small, it can’t affect the supply and demand for any product of the large nation. As such, the small nation gets all the gains from trade and the large nation gets no gains from trade.

Distribution of the gains from trade

Export-prompting measures Export subsidies(出口补贴）Export credit (出口信贷）

Export Credit Guarantee System（出口信贷担保）Foreign exchange dumping (外汇倾销）

Free trade areas

Assignment mechanisms of import quotas

public auction-system 公开拍卖

constant preference-system 固定的受惠

application-procedure system 使用申请程序

Export subsidies and its’ economic effect The implication of export subsidesA quota is a direct quantitative restriction on the amount of a commodity allowed to be imported or exported (in the form of voluntary export restraints).

As tariffs were negotiated down during the postwar period, then import quotas have been widely used by developed nations to protect their agriculture and by developing nations to stimulate import substitution of manufactured products and for balance-of-payments reasons.

Other non-tariff barriers Industrial policy ,Government procurement Dumping and anti-dumping T echnical barriers to tradeLabor and environmental standards,Transportation costs and trade The Theory of Protective Trade 1.Merchantilism 2. The optimum tariff theory

3.The infant industry argument

4. Keynes’ protective trade theory

5. Strategic trade policy

6. The political economy of protectionism

幼稚产业论 a national economy can be divided into five stages. In an early stage of industrialization required tariff protection to stimulate development.

Infant industries are those that are not strong enough to survive open competition and have the growth potential. How toJudge。。

https://www.360docs.net/doc/3319247653.html,/doc/b713809807.html,l’s test (穆勒标准）

2.Bastable’s test（巴斯塔布尔标准）

3.Kemp’s test (坎普标准）Main ideas of Keynes’ theory:There is deficiency of the domestic effective demand in free trade. So in open economy, the government should encourage export and limit import.

While this theory realized that the surplus can’t increase without limitation.

Post-Keynes’ multiplier theory

Strategic trade policy is based on the incomplete competitive market, especially in the oligopoly market.The government should protect domestic industries by using the export subsides or import protection to change the market structure and gain the international competition.

The political economy of protectionism Given that a country as a whole gains from trade, one would expect fr ee trade to dominate most countries’ international trade policy. While the fact is not so.The interaction between the gains from trade for the country and the gains from trade barriers for producers explains the existence of trade barriers.

Protectionism and public choice Economists have developed the theory of public choice to describe political behavior.The premise underlying the theory of public choice is that politicians, like all individuals, attempt to maximize their utility. In most cases, utility maximization for a politician means maximizing the number of votes he or she will receive in the next election.This implies the politicians tend to favor programs having immediate and clear-cut benefits combined with vague, difficult to measure, or deferred costs. Introduction to regional economic arrangements Regional economic integration refers to agreements between countries to reduce tariff and non-tariff barriers to the free flow of goods, services, and factors of production between each other.

Regional trade agreements are trade agreements between two or more countries that reduce trade barriers only for those countries that are members of the agreements

Trade creation effects: Trade creation occurs when some domestic production in a nation is replaced by lower-cost imports from another member nation after the establishment of a customs union. This is a positive effect and can increase the welfare of member nations as a whole, because it leads to greater specialization in production based on comparative advantage. Trade diversion effect: Trade diversion occurs when lower-cost producers from outside the customs union are replaced by higher-cost producers from a union member after the establishment of a customs union because of the preferential trade treatment given to member nations. This is a negative effect and may reduce the welfare of the customs union as a whole, because it shifts production from more efficient producers outside the customs union to less efficient producers inside the customs union.

intra-industry trade:International trade in the products of the same industry is called intra-industry trade

inter-industry trade:International trade in the products of the different industries is called inter-industry trade.

Economies of scale A common explanation of international trade in differentiated products is that this trade is a result of economies of scale in the product’s production.

Two forms of economies of scale

Internal economies of scale : with the firm’s output expands, the average cost of t he production reduces.

External economies of scale: with the entire industry output expands, the average cost of the production reduces.

Reasons of internal economies of scale

At a larger scale of operation, a greater division of labor and specialization becomes possible.

A larger scale of operation may permit the introduction of more specialized and productive machinery.

Also at a larger scale, the firm can fully utilize the market information, management skills, brand reputation and so on.

The impacts on trade patterns based on internal economies of scale

1.Trade patterns based on internal economies of scale are uncertain.

2.Trade patterns based on internal economies of scale are intra-industry trade and inter-industry trade.

3.Internal economies of scale may lead to monopoly, oligopoly, monopolistic competition.

4.The unity and expansion of markets are the prerequisite for internal economies of scale to work.

The reasons of external economies of scale 1.the effect of specialization among enterprises2.the effect of factor-sharing among enterprises3.the effect of knowledge-brimming among enterprises4.the effect of market agglomeration among enterprises

The impacts on trade patterns based on external economies of scale1.Trade patterns based on external economies of scale is not certain.2.Small and medium-sized firms can get comparative advantage by external economies of scale and go into world market

Technological gap is the direct reason for international trade.

The basic idea behind the product cycle is that developed countries tend to specialize in producing new goods based on technological innovations, whereas the developing countries tend to specialize in the production of already well-established goods.

The logical basis of overlapping demand theory

Countries with similar standards of living will tend to consume similar types of goods, and will tend to have the similar production structures. So trade will occur among countries with similar income level.

The competitive advantages of nations具有比较优势的国家未必具有竞争优势

Porter’s Competitive Advantage of Nations

Factor endowments （basic factors and advanced factors)

land, labor, capital, workforce, infrastructure, technology

Demand conditions large, sophisticated domestic consumer base: offers an innovation friendly environment and a testing ground

Related and supporting industries

local suppliers cluster around producers and add to innovation

Firm strategy, structure, rivalry competition good, national governments can create conditions which facilitate and nurture such conditions

Balance of payments equilibrium and disequilibrium

Balance of payments equilibrium is a state that the debits equals to the credits in the autonomous transactions. This would simply mean that their stocks of international reserves are unchanging

Deficit in the balance of payments: the excess of debits over credits in the autonomous transactions. Deficit countries will experience reserve asset losses.

Surplus in the balance of payments: the excess of credits over debits in the autonomous transactions. surplus countries will experience reserve asset accumulation.

The price-specie-flow mechanism (价格现金流动机制） is an automatic adjustment mechanism under the gold standard.

The deficit nation loses gold and experiences a reduction in its money supply. This in return reduces domestic prices, which stimulates the nation’s exports and discourages its imports until the deficit is eliminated. A surplus is corrected by the opposite process.

The Effect of Exchange Rate Changes on balance of payment When a nation’s currency depreciates, domestic goods become relatively cheaper and foreign goods relatively more expensive in the global market.

Hence, we would expect exports to rise and imports to decline.

Marshall-Lerner condition depreciation/appreciation can correct the balance of payments if the sum of the price elasticity of the demand for imports and demand for exports, in absolute terms, is greater than 1.

J-Curve following a depreciation or devaluation of the currency, the nation’s balance of payments worsens before it improves.

J-curve effect: The deterioration before a net improvement in a country’s trade ba lance resulting from a depreciation or devaluation.

Reasons for the J-Curve The M-L condition is satisfied in the long run but not in the short run. Short-run elasticity of demand are smaller than long-run elasticity because of the recognition lags; decision lags; delivery lags; replacement lags; production lags and so on. Comments on the elasticity approach 1.The balance of trade is simplified to the trade balance.

2. The supply elasticity is assumed to be infinitely elastic.

3. Real GNP is assumed to be constant.

4. The depreciation/appreciation may cause other problems.

Overview of The Absorption Approach 1This approach emphasizes changes in real domestic income and absorption as a determinant of a nation’s balance of payments.

2The balance of trade is viewed as the difference between what the economy produces and what it absorbs for domestic use.

The Monetary Approach to Balance-of-Payments

1.There is a stable demand for money.

2. Output, employment and other real variables are at their long-run equilibrium values.

3. Free trade and capital flow

Three expressions of balance of payment：B = X-M = Y-A =ΔS

Elasticity approach emphasizes the relationship between trade balance and exchange rate Absorption approach emphasizes the difference of output and absorption.

Monetary approach emphasizes the change of the international reserve.

Mint Parity Theory (铸币平价理论) Theory of Purchasing Power Parity（购买力平价理论）Theory of Interest Rate Parity（利率平价理论）The Monetary Approach（货币主义理论）The Portfolio Balance Approach （资产组合平衡理论）

Factors that affect the demand for foreign exchange Investment abroad

Changes in domestic income Changes in relative price A country’s tas tes and preferences Factors that affect the supply of foreign exchange

Changes in foreign income Changes in relative prices Foreign

investment

Theory of Purchasing Power Parity

The law of one price Disregarding barriers to trade and transportation costs, the law of one price states that identical goods sold in competitive markets should cost the same everywhere when prices are expressed in terms of the same currency.

Purchasing Power Parity is the theory that changes in exchange rates are related to changes in relative prices among countries.

Purchasing Power Parity states that an exchange rate between two countries should equal the ratio of the price level in one country to the price level in the other country.

Absolute Purchasing Power Parity is the theory that the bilateral exchange rate between two countries is related to the ratio of the level of prices between two countries.EAB=PA/PB Relative Purchasing Power Parity between two countries states that the percentage change in the bilateral exchange rate is equal to the difference in the percentage change in the national price levels over any given period of time.

Theory of Interest Rate Parity This theory emphasizes the relationship between interest rate and the spot exchange rate and the forward exchange rate. This theory contains uncovered interest rate parity(无抛补利率平价)and covered interest rate parity（抛补利率平价）

The Portfolio Balance Approach

The portfolio balance approach assumed that the domestic and foreign bonds were imperfect substitutes.

The exchange rate is determined in the process of equilibrating or balancing the total demand and supply of

financial assets in one country.

All the individuals and firms hold their financial wealth in some combination of domestic money, a domestic bond, and a foreign bond denominated in the foreign currency.

factor-proportions theory

This theory tried to explain the causes of comparative advantage and states that a country’s comparative advantage is determined by its initial resource endowments.

The factor-proportions theorem The factor-proportions theorem states that a country has a comparative advantage in, and exports, the good that intensively use the country’s abundant factor of production. Conversely, a country has a comparative disadvantage in, and imports, the good that intensively uses the country’s relatively sc are factor of production. Factor Price Equalization Theorem Given all the assumptions of the HO model, international trade will bring about equalization in the relative and absolute returns to homogeneous factors across nations.

1)Trade and the distribution--Stolper-Samuelson theorem

It states that an increase in the relative price of a commodity raises the real price of the factor used intensively in the commodity’s production and reduces t he real price of the other factor. These changes in factor prices tend to increase the percentage of national income the abundant factor receives. The reverse is true for the scare factor.

THE RYBCZYNSKI THEOREM: At constant world prices, if a country experiences an increase in the supply of one factor, it will produce more of the product intensive in that factor and less of the other. If the enlarged industry is exporting industry, the trade volume will increase, and the terms of trade will worsen. While if

the industry is importing-competitive industry, the trade volume will decrease and the terms of trade will improve.

While for a small country, the terms of trade stays constant.

2) Factor Growth and Immiserizing Economic Growth Generally speaking, econom ic growth can increase a nation’s welfare. But in the case of a la rge nation, the great expansion of its exporting industry can enlarge the volume of exporting and force the price of exporting commodity to go down. If the price of exporting commodity goes down seriously, this may offset the income effect of economic growth, and cause net loses of national welfare.

3) Factor Growth and the reversal of Comparative Advantage （比较优势逆转）

If a nation’s relatively scarce factor grows greatly, it may cause the natio n’s comparative advantage to reverse. The former exporting industry may turn to the importing industry and the former importing industry may turn to the exporting industry. This phenomenon is called “the Reversal of Comparative Advantage”

Specific factor is the factor that is used in a specific industry.

Leontief Paradox The contradiction between the empirical results of Leontief and the conclusion of the factor proportions theorem is called Leontief Paradox.

Reasons Natural Resources R&D factor Great differentiations of tastes

Serious factor-price distortion Factor-intensity reversal (要素密集度逆转）

Special structure of trade barriers Effect of Different Labor Efficiency Human capital Open economy Closed Economy: There are no economic relations with other countries. No exports, no

imports, and no capital flows.

Open Economy: An economy that interacts freely with other economies around the world.

Internal balance and external balance

The most important goals of open economies are internal balance and external balance. Internal balance: a steady growth of the domestic economy, low unemployment rate and low inflation rate. External balance: equilibrium in the balance of payments

Major policy instruments （1）Expenditure-changing policies (支出改变政策）

Expenditure-changing policies include both fiscal policies and monetary policies.

Fiscal policies refers to changes in government expenditures, taxes, or both.

Monetary policy involves a change in the nation’s money supply that affects domestic interest rates and price level.

(2) Expenditure-switching policies （支出转移政策）

Expenditure-switching policies refer to changes in the exchange rate.

A devaluation switches expenditures from foreign to domestic commodities and a overvaluation switches expenditures from domestic to foreign products.

(3) Direct control （直接管制）Direct controls consist of quotas and other restrictions on the flow of international trade and capital.

How a nation maintains the fixed exchange rate?T o hold the exchange rate constant, a central bank must always be willing to trade currencies at the fixed exchange rate with the private actors in the foreign exchange market.

Non-sterilized intervention (非消毒干预，非冲销操作）and sterilized intervention Sterilized intervention means that Central banks carry out equal foreign and domestic asset transactions in opposite direction to nullify the impact of their foreign exchange operations on the domestic money supply. Sterilization has no effect on the money supply.

while a country can’t use the sterilized intervention in the long run.

Non-sterilized intervention means that the central banks only carry out the foreign exchange intervention to keep the constant exchange rate and the money supply has changed based on this. the surplus of the balance of payments will increase the money supply in a nation. The deficit of the balance of the payments will decrease the money supply in a nation short-run and static effects of customs unions

Consumer surplus: +(a+b+c+d) Supplier surplus: -a Government revenue: –(c+e)

Overall welfare: (b+d)-e , e is the trade division effect, b+d is the trade creation effect. Long-run and dynamic effects of customs unions Economies of scale from the enlarged market. Stimulus to investment and economic growth. Increased competition

Promote technological progress. Lead to regional monopoly in the long run.

Effective rate of protection a measurement of the amount of protection provided to an industry by a country’s tariff schedule Balance of payments: A summary statement of all the international transactions of the residents of a nation with the rest of the world during a particular period of time, usually a year. Exchange rate: The domestic currency price of the foreign

currency