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| Preface | |
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| Introduction | |
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| The Subject of International Economics | |
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| Patterns of International Trade | |
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| The Organization of This Book | |
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| Comparative Advantage and the Basic Model of International Trade | |
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| The Gains from Trade | |
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| Background Behavior: Demand | |
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| Background Behavior: Supply | |
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| Gains from Trade and Free-Trade Equilibrium | |
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| Winners and Losers: Autarky to Free Trade | |
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| Summary | |
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| Chapter Problems | |
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| The Box Diagram | |
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| Substitution and Income Effects | |
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| The Offer Curve Diagram | |
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| Applications of the Basic Model | |
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| Disturbances from Abroad and the Terms of Trade | |
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| Protecting the Import-Competing Commodity | |
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| Growth and International Trade | |
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| The Transfer Problem | |
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| Wider Interpretations of the Basic Trade Model | |
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| Trade and Market Structure | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| The Stability Issue | |
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| Globalization: Trade Patterns and Income Distribution | |
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| Technology and International Income Distribution: The Ricardian Model | |
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| The Ricardian Setting | |
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| Free-Trade Equilibrium | |
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| International Wage Comparisons and Productivities | |
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| A Many-Commodity and Many-Country World | |
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| Winners and Losers from Productivity Shocks | |
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| Nontraded Commodities | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| Transitional Unemployment | |
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| Factor Endowments and Trade I: The Specific Factors Model | |
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| Diminishing Returns and Factor Hires | |
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| Outputs and Income Distribution in the Closed Economy | |
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| Outputs and Income Distribution with Free Trade | |
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| Growth in Factor Endowments | |
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| Consequences for Political Economy | |
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| The Pattern of Trade | |
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| Alternative Interpretations: Specific Capital or Specific Labor | |
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| Dutch Disease | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| The Transformation Schedule | |
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| Factor Endowments and Trade II: The Heckscher-Ohlin Model | |
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| If Technology Is Rigid | |
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| Flexible Technology | |
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| Possible Trade Patterns and the Distribution of Income | |
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| International Trade with Many Commodities | |
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| How Concentrated Is Production? | |
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| Changing Comparative Advantage with Economic Growth | |
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| Heckscher-Ohlin Theory and Empirical Evidence | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| The Production Box | |
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| Imperfect Competition, Increasing Returns, and Product Variety | |
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| The Prevalence of Intra-Industry Trade | |
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| Consumer Behavior and the Demand for Product Variety | |
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| Increasing Returns in Production | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| Resource Trade, Outsourcing, and Product Fragmentation | |
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| Given Resources and Footloose Production Processes | |
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| Footloose Inputs: The Joint Role of Comparative and Absolute Advantage | |
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| Outsourcing and the International Fragmentation of Production | |
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| Outsourcing and Advanced Country Wage Rates | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| International Factor Movements: Labor and Capital | |
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| Factor Movements, Efficiency, and Welfare | |
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| International Capital Movements: Selected Issues | |
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| Multinationals and Foreign Direct Investment | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| The Theory and Practice of Commercial Policy | |
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| Protection and the National Welfare | |
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| Protection by a Small Country | |
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| Protection by a Large Country | |
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| Taxing Trade: Domestic Welfare | |
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| Taxing Trade: World Welfare | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| Tariffs and the Offer Curve | |
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| The Political Economy of Protection | |
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| Protection as a Device for Raising Revenue | |
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| Commercial Policy as a Second-Best Device | |
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| Protection and Rent-Seeking Activities | |
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| Growth, Protection, and Welfare | |
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| Protection and Unemployment | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| Trade Policy and Imperfect Competition | |
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| Monopoly and the Gains from Trade | |
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| Cartels and the Interests of Producing and Consuming Countries | |
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| Monopoly and Policies of Exporting and Importing Countries | |
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| Intellectual Property Rights | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| International Duopoly and National Strategy | |
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| Trade Controls in Practice | |
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| Tariffs: Levels and Trends | |
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| Multilateral Tariff Reduction | |
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| Devices for Special Protection | |
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| Special Protection in Action | |
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| Prospects for Special Protection | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| Preferential Arrangements and Regional Issues in Trade Policy | |
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| Regional Preferences and Regional Trade | |
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| Welfare Effects of Trade Preferences | |
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| Preferential Arrangements in Practice | |
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| Trade Problems of the Economies in Transition | |
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| Trade and Growth: China and the Asian NICs | |
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| Preferential Arrangements: New Policy Issues | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| Money, Income, and the Balance of Payments | |
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| The Balance of Payments Accounts | |
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| Breakdown of the Accounts | |
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| How Individual Transactions Are Recorded | |
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| Double-Entry Bookkeeping | |
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| The Balances | |
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| Statistical Errors in the Payments Accounts | |
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| Summary | |
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| Chapter Problems | |
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| The Foreign Exchange Market and Trade Elasticities | |
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| The Flow of Supply and Demand for Foreign Exchange | |
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| Empirical Effects of Devaluation on the Trade Balance | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| Stability of the Foreign Exchange Market | |
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| National Income and the Trade Balance | |
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| The Small-Country Keynesian Model | |
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| The National Saving-Investment Identity | |
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| Multipliers | |
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| The Transfer Problem | |
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| For a Large Country: The Two-Country Keynesian Model | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| The Two-Country Model in Graphical Form | |
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| Spending and the Exchange Rate in the Keynesian Model | |
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| Transmission of Disturbances | |
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| Expenditure-Switching and Expenditure-Reducing Policies | |
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| Monetary Factors | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| The Laursen-Metzler-Harberger Effect | |
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| The Assignment Problem | |
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| The Money Supply, the Price Level, and the Balance of Payments | |
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| The Nonsterilization Assumption | |
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| The Purchasing Power Parity Assumption | |
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| Purchasing Power Parity in a Hyperinflation | |
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| PPP in the Model of the Balance of Payments | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| The Gold Standard | |
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| Reserve Flows After Spending Increase and Devaluation | |
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| The Determination of the Balance of Payments in the Monetarist Model | |
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| Developing Countries and Other Small Open Economies with Nontraded Goods | |
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| Nontraded Goods | |
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| Expenditure and the Relative Price of Nontraded Goods | |
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| The Monetary Approach with Nontraded Goods | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| International Financial Markets and Their Macroeconomic Implications | |
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| The Globalization of Financial Markets | |
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| The Postwar Financial System (1944-1973) | |
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| The Foreign Exchange Market | |
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| Liberalization | |
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| Innovation | |
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| Advantages of Financial Integration | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| The Effect of a Budget Deficit Under Intertemporal Optimization | |
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| The Mundell-Fleming Model with Partial International Capital Mobility | |
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| The Model | |
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| Fiscal Policy and the Degree of Capital Mobility Under Fixed Rates | |
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| Monetary Policy and the Degree of Capital Mobility Under Fixed Rates | |
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| When Money Flows Are Not Sterilized | |
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| Other Automatic Mechanisms of Adjustment | |
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| The Pursuit of Internal and External Balance | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| Zones of Internal and External Balance | |
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| Fiscal and Monetary Policy Under Modern Financial Market Conditions | |
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| Fiscal Policy Under Floating: An Effect Mitigated by Capital Mobility | |
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| Monetary Policy Under Floating: An Effect Enhanced by Capital Mobility | |
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| Policy Under Perfect Capital Mobility | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| Crises in Emerging Markets | |
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| Inflows to Emerging Markets | |
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| Managing Outflows | |
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| Speculative Attacks | |
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| Contagion | |
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| IMF Country Programs | |
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| Contractionary Effects of Devaluation | |
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| Capital Controls | |
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| Reform of International Financial Architecture | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| Interdependence and Policy Coordination | |
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| International Transmission of Disturbances Under Floating Exchange Rates | |
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| Econometric Models of the Interdependent World Economy | |
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| International Macroeconomic Policy Coordination | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| Supply and Inflation | |
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| The Aggregate Supply Relationship | |
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| Supply Relationship with Indexed Wages | |
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| Inflation | |
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| Alternative Anchors for a Country's Money | |
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| The Choice of Exchange Rate Regime | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| The Determination of Exchange Rates in International Asset Markets | |
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| Expectations, Money, and the Determination of the Exchange Rate | |
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| Interest Rate Parity Conditions | |
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| The Monetary Model of Exchange Rates with Flexible Prices | |
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| Two Examples of the Importance of Expectations | |
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| Overshooting and the Real Exchange Rate | |
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| Two More Examples of the Importance of Expectations | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| Exchange Rate Forecasting and Risk | |
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| Forecasting the Spot Exchange Rate | |
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| The Role of Exchange Risk | |
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| Portfolio Balance Effects on the Exchange Rate | |
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| Summary | |
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| Chapter Problems | |
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| Suggestions for Further Reading | |
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| Supplements for Selected Chapters | |
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| The Equations of Exchange Equilibrium | |
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| Stability and Comparative Statics in the Basic Trade Model | |