International Trade

1
International Trade

• Appleyard / Field / Cobb
• Sixth Edition

2
Brief Contents

• Chapter 1
• The world of International Economics
• PART 1 THE CLASSICAL THEORY OF TRADE
• Chapter 2
• Early Trade Theories Mercantilism and the
  Transition to the Classical World of David
  Ricardo
• Chapter 3
• The Classical World of David Ricardo and
  Comparative Advantage

3

• Chapter 4
• Extensions and Tests of the Classical Model of
  Trade
• PART 2 NEOCLASSICAL TRADE THEORY
• Chapter 5
• Introduction to Neoclassical Trade Theory
  Tools to Be Employed
• Chapter 6
• Gains from Trade in Neoclassical Theory

4

• Chapter 7
• Offer Curves and the Terms of Trade
• Chapter 8
• The Basis for Trade Factor Endowments and the
  Heckscher-Ohlin Model
• Chapter 9
• Empirical Tests of the Factor Endowments
  Approach

5

• PART 3 ADDITIONAL THEORIES AND EXTENSIONS
• Chapter 10
• Post-Heckscher-Olin Theories of Trade and
  Intra-Industry Trade
• Chapter 11
• Economic Growth and International Trade
• Chapter 12
• International Factor Movements

6

• PART 4 TRADE POLICY
• Chapter 13
• The Instruments of Trade Policy
• Chapter 14
• The Impact of Trade Policies
• Chapter 15
• Arguments for Interventionist Trade Policies
• Chapter 16
• Political Economy and U.S. Trade Policy

7

• Chapter 17
• Economic Integration
• Chapter 18
• International Trade and the Developing
  Countries

8
Chapter 1

• The World of
• International Economics

9
Introduction

• Welcome to the study of international trade!
• You will be studying one of the oldest branches
  of economics.
• The study of international economics concerns
  decision making with respect to the use of scarce
  resources to meet desired economics objectives.

10
The Nature of Merchandise Trade

• Throughout the past four decades, international
  trade volume has, on average, outgrown
  production.
• 1. The Geographical composition of Trade
• The industrialized countries dominate world
  trade.
• 2. The Commodity Composition of Trade

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• Among the 2005 commodity composition of world
  trade, manufactures account for 72 percent of
  trade, with the remaining amount consisting of
  primary prodects.
• 3.U.S. International Trade
• Canada is the most important trading partner,
  both in exports and imports
• Agricultural products are an important source of
  exports

12

• The capital goods category is the largest single
  export category
• Industrial supplies is also an important export
  category.

13
World Trade In Services

• In 2005, the trade in services estimated to be
  more than 2 trillion.
• International trade in services broadly consists
  of commercial services, investment income, and
  government services.
• International services trade is also concentrated
  among the industrial countries.

14
The Changing Degree of Economic Interdependence

• It is important to recognize both the large
  absolute level of international trade and the
  relative importance of trade has been growing for
  nearly every country and for all countries as a
  group.

15
Chapter 2

• Early Trade Theories Mercantilism and the
  Transition to the Classical World of David Ricardo

16
Introduction

• The Oracle in the 21st Century
• Diligence and intelligence are strategies for
  improving one