曼昆经济学 Application International Trade.docx

1、曼昆经济学 Application International TradeA P P L I C A T I O N : I N T E R N A T I O N A L T R A D E IN THIS CHAPTER YOU WILL . . .Consider what deter mines whether a countr y impor ts or expor ts a good Examine who wins and who loses fr om inter national trade Lear n that the gains to winners fr om int

2、er national trade exceed the losses to losers If you check the labels on the clothes you are now wearing, you will probably find that some of your clothes were made in another country. A century ago the textiles and clothing industry was a major part of the U.S. economy, but that is no longer the ca

3、se. Faced with foreign competitors that could produce quality goods at low cost, many U.S. firms found it increasingly difficult to produce and sell textiles and clothing at a profit. As a result, they laid off their workers and shut down their fac- tories. Today, much of the textiles and clothing t

4、hat Americans consume are im- ported from abroad.The story of the textiles industry raises important questions for economic pol- icy: How does international trade affect economic well-being? Who gains and who loses from free trade among countries, and how do the gains compare to the losses?Analyze t

5、he welfar e ef fects of tarif fs and impor t quotas Examine the ar guments people use to advocate trade r estrictions 179 Chapter 3 introduced the study of international trade by applying the princi- ple of comparative advantage. According to this principle, all countries can bene- fit from trading

6、with one another because trade allows each country to specialize in doing what it does best. But the analysis in Chapter 3 was incomplete. It did not explain how the international marketplace achieves these gains from trade or how the gains are distributed among various economic actors.We now return

7、 to the study of international trade and take up these questions. Over the past several chapters, we have developed many tools for analyzing how markets work: supply, demand, equilibrium, consumer surplus, producer surplus, and so on. With these tools we can learn more about the effects of internati

8、onal trade on economic well-being.THE DETERMINANTS OF TRADE Consider the market for steel. The steel market is well suited to examining the gains and losses from international trade: Steel is made in many countries around the world, and there is much world trade in steel. Moreover, the steel market

9、is one in which policymakers often consider (and sometimes implement) trade restric- tions in order to protect domestic steel producers from foreign competitors. We ex- amine here the steel market in the imaginary country of Isoland.THE EQUILIBRIUM WITHOUT TRADE As our story begins, the Isolandian s

10、teel market is isolated from the rest of the world. By government decree, no one in Isoland is allowed to import or export steel, and the penalty for violating the decree is so large that no one dares try.Because there is no international trade, the market for steel in Isoland consists solely of Iso

11、landian buyers and sellers. As Figure 9-1 shows, the domestic price ad- justs to balance the quantity supplied by domestic sellers and the quantity de- manded by domestic buyers. The figure shows the consumer and producer surplus in the equilibrium without trade. The sum of consumer and producer sur

12、plus measures the total benefits that buyers and sellers receive from the steel market.Now suppose that, in an election upset, Isoland elects a new president. The president campaigned on a platform of “change” and promised the voters bold new ideas. Her first act is to assemble a team of economists

13、to evaluate Isolandian trade policy. She asks them to report back on three questions: If the government allowed Isolandians to import and export steel, what would happen to the price of steel and the quantity of steel sold in the domestic steel market? Who would gain from free trade in steel and who

14、 would lose, and would the gains exceed the losses? Should a tariff (a tax on steel imports) or an import quota (a limit on steel imports) be part of the new trade policy?Price of SteelEquilibrium price0Consumer surplusProducer surplusEquilibrium quantityDomestic supplyDomestic demandQuantity of Ste

15、elFigure 9-1 THE EQUILIBRIUM WITHOUT INTERNATIONAL TRADE . When an economy cannot trade in world markets, the price adjusts to balance domestic supply and demand. This figure shows consumer and producer surplus in an equilibrium without international trade for the steel market in the imaginary count

16、ry of Isoland.After reviewing supply and demand in their favorite textbook (this one, of course), the Isolandian economics team begins its analysis.THE WORLD PRICE AND COMPARATIVE ADVANTAGE The first issue our economists take up is whether Isoland is likely to become a steel importer or a steel expo

17、rter. In other words, if free trade were allowed, would Isolandians end up buying or selling steel in world markets?To answer this question, the economists compare the current Isolandian price of steel to the price of steel in other countries. We call the price prevailing in world markets the world

18、price. If the world price of steel is higher than the domestic price, then Isoland would become an exporter of steel once trade is permitted. Isolandian steel producers would be eager to receive the higher prices available abroad and would start selling their steel to buyers in other countries. Conv

19、ersely, if the world price of steel is lower than the domestic price, then Isoland would be- come an importer of steel. Because foreign sellers offer a better price, Isolandian steel consumers would quickly start buying steel from other countries.In essence, comparing the world price and the domesti

20、c price before trade in- dicates whether Isoland has a comparative advantage in producing steel. The do- mestic price reflects the opportunity cost of steel: It tells us how much an Isolandian must give up to get one unit of steel. If the domestic price is low, the cost of producing steel in Isoland

21、 is low, suggesting that Isoland has a comparative advantage in producing steel relative to the rest of the world. If the domestic price is high, then the cost of producing steel in Isoland is high, suggesting that foreign countries have a comparative advantage in producing steel.world price the pri

22、ce of a good that prevails in the world market for that goodAs we saw in Chapter 3, trade among nations is ultimately based on compar- ative advantage. That is, trade is beneficial because it allows each nation to spe- cialize in doing what it does best. By comparing the world price and the domestic

23、 price before trade, we can determine whether Isoland is better or worse at pro- ducing steel than the rest of the world.QUICK QUIZ: The country Autarka does not allow international trade. In Autarka, you can buy a wool suit for 3 ounces of gold. Meanwhile, in neighboring countries, you can buy the

24、same suit for 2 ounces of gold. If Autarka were to allow free trade, would it import or export suits?THE WINNERS AND LOSERS FROM TRADE To analyze the welfare effects of free trade, the Isolandian economists begin with the assumption that Isoland is a small economy compared to the rest of the world s

25、o that its actions have negligible effect on world markets. The small-economy as- sumption has a specific implication for analyzing the steel market: If Isoland is a small economy, then the change in Isolands trade policy will not affect the world price of steel. The Isolandians are said to be price

26、 takers in the world economy. That is, they take the world price of steel as given. They can sell steel at this price and be exporters or buy steel at this price and be importers.The small-economy assumption is not necessary to analyze the gains and losses from international trade. But the Isolandia

27、n economists know from experi- ence that this assumption greatly simplifies the analysis. They also know that the basic lessons do not change in the more complicated case of a large economy.THE GAINS AND LOSSES OF AN EXPOR TING COUNTR YFigure 9-2 shows the Isolandian steel market when the domestic e

28、quilibrium price before trade is below the world price. Once free trade is allowed, the domestic price rises to equal the world price. No seller of steel would accept less than the world price, and no buyer would pay more than the world price.With the domestic price now equal to the world price, the

29、 domestic quantity supplied differs from the domestic quantity demanded. The supply curve shows the quantity of steel supplied by Isolandian sellers. The demand curve shows the quantity of steel demanded by Isolandian buyers. Because the domestic quantity supplied is greater than the domestic quanti

30、ty demanded, Isoland sells steel to other countries. Thus, Isoland becomes a steel exporter.Although domestic quantity supplied and domestic quantity demanded differ, the steel market is still in equilibrium because there is now another participant in the market: the rest of the world. One can view

31、the horizontal line at the world price as representing the demand for steel from the rest of the world. This demand curve is perfectly elastic because Isoland, as a small economy, can sell as much steel as it wants at the world price.Price of SteelPrice after tradePrice before tradeDomestic supplyWo

32、rld priceFigure 9-2 INTERNATIONAL TRADE IN AN EXPORTING COUNTRY. Once trade is allowed, the domestic price rises to equal the world price. The supply curve shows the quantity of steel produced domestically, and the demand curve shows the quantity consumed domestically. Exports from Isoland equal the difference between the domestic quan