International Trade in Goods and Factor Mobility

International Trade in Goods and Factor Mobility

by Kar-yiu Wong
     
 

ISBN-10: 0262231794

ISBN-13: 9780262231794

Pub. Date: 10/26/1995

Publisher: MIT Press

This up-to-date synthesis of the basic tools and survey results in international trade theory is unique in giving factor mobility equal billing with goods trade, highlighting factor flows in the context of a mainstream approach to trade theory.

The importance of the international flow of factors has grown in recent decades, primarily because of increasing returns,

Overview

This up-to-date synthesis of the basic tools and survey results in international trade theory is unique in giving factor mobility equal billing with goods trade, highlighting factor flows in the context of a mainstream approach to trade theory.

The importance of the international flow of factors has grown in recent decades, primarily because of increasing returns, imperfect competition, multinational corporations, and labor migration; theories of factor mobility and trade in goods can no longer be lumped together. Using sophisticated techniques, as well as simple economic intuitions and easy-to-follow diagrams, Kar-yiu Wong systematically presents within unified frameworks all the basic analytical techniques involved in the theories of international trade and factor mobility.

Wong also provides extensive coverage of such issues as interactions between international trade in goods and capital movement, external economies of scale, monopolistic competition and differentiated products, oligopoly, welfare economics of international trade, and policy analysis for various models, and he devotes two separate chapters to multinational corporations and international labor migration. New techniques and approaches to these issues are suggested, and new results obtained for many of them.

For instance, the discussion of intra-industry trade in the presence of positive transport cost and arbitrage is new, as is the systematic examination of the relationship between international trade in goods and factor mobility with external economies of scale, monopolistic competition, and oligopoly. Of particular importance to trade theorists, these issues serve as the link between neoclassical andimperfect-competition models.

Product Details

ISBN-13:
9780262231794
Publisher:
MIT Press
Publication date:
10/26/1995
Edition description:
New Edition
Pages:
699
Product dimensions:
7.00(w) x 10.00(h) x 1.90(d)

Table of Contents

Preface
I INTRODUCTION
1 Introduction
1.1 Introduction
1.2 Factor Content of Trade
1.3 Interactions between Trade in Goods and Factor Mobility
1.4 International Factor Mobility with EXternal Economies of
Scale
1.5 International Factor Mobility with Monopolistic Competition
1.6 International Factor Mobility with Oligopoly
1.7 Multinational Corporations and Foreign Direct Investment
1.8 International Labor Migration
1.9 Other Features of This Book
1.10 Structure of This Book
1.11 Rising Significance of International Trade in Goods and
Factor Movements
II PURE THEORY: THE NEOCLASSICAL MODELS
2 General Equilibrium with Constant Returns and
Perfect Competition
2.1 The TwoFactor, TwoSector Framework
2.2 Unit Cost Function and InputOutput Coefficients
2.3 The StolperSamuelson and the Rybczynski Theorems
2.4 The Gross Domestic Product (GDP) Function
2.5 The Ricardian Model
2.6 The SpecificFactors Model
2.7 Consumption Demand
2.8 Direct and Indirect Trade Utility Functions
2.9 Stability of Equilibrium
2.10 The Offer Curve
2.11 International Trade Equilibrium
AppendiX
3 Comparative Advantages and Factor Content of Trade
3.1 Natural Trade
3.2 The Law of Comparative Advantage
3.3 The Factor Endowment Theory of Comparative Advantage
3.4 Goods Trade and Factor Prices
3.5 Are Goods Trade and Factor Mobility Substitutes?
3.6 The General Law of Comparative Advantage
3.7 Chain Version of Comparative Advantage
3.8 Different Concepts of Factor Content of Trade
3.9 Factor Content of Trade for a Single Economy
3.10 Factor Content of Trade with Possibly Unequal Factor Prices
3.11 ActualFactor Content of Trade with Equal Factor Prices
3.12 The Leontief ParadoX and Factor Content of Trade
3.13 International Factor Movements and Factor Content of Trade
3.14 Factor Accumulation and Dynamic Comparative Advantage
4 International Goods Trade and Capital Movement
4.1 The Fundamental Trade Theorems in the Presence of Capital
Movement
4.2 Free Goods Trade and Capital Movement
4.3 Two Graphical Apparatuses
4.4 The Chipman Flat and Equilibrium with Diversification
4.5 More Conditions for an Efficient Production with
Diversification
4.6 Stability of Equilibrium
4.7 Are Goods Trade and Factor Mobility Substitutes?
4.8 Patterns of Trade under International Capital Movement
4.9 Comparative Advantage and Absolute Advantage
4.10 International Capital Movement with SectorSpecific Capital
III PURE THEORY: VARIABLE RETURNS AND IMPERFECT COMPETITION
5 EXternal Economies of Scale
5.1 EXternal Effects in Production
5.2 OutputGenerated EXternal Effects
5.3 Prices, Output Levels, and Factor Endowments
5.4 Stability of Production Equilibrium
5.5 Autarkic Equilibrium
5.6 Foreign Trade under National Economies of Scale
5.7 Patterns of Trade
5.8 Factor Prices under Free Trade
5.9 International Factor Movement
5.10 International Economies of Scale
AppendiX
6 Monopolistic Competition and Intraindustry Trade in
Differentiated Products
6.1 Preferences
6.2 Production
6.3 A Closed Economy
6.4 Effects of Factor Accumulation
6.5 Free Trade in Goods
6.6 Volumes of Trade
6.7 International Factor Movement with Differentiated Products
6.8 Commodity Trade and Factor Movement
AppendiX
7 Oligopoly and Intraindustry Trade in Identical Products
7.1 Cournot Competition with No Arbitrage: The Basic Model
7.2 Free Entry and EXit
7.3 Cournot Competition with Arbitrage: Zero Transport Cost
7.4 Cournot Competition with Arbitrage and Positive Transport Cost
7.5 Bertrand Competition with a Homogeneous Product
7.6 Oligopoly and General Equilibrium
7.7 Trade with Oligopoly: A General Equilibrium Approach
7.8 Validity of the Fundamental Trade Theorems
7.9 Factor Mobility and Commodity Trade
IV WELFARE ECONOMICS AND GAINS FROM TRADE
8 Core Theorems of the Welfare Economics of
International Trade
8.1 The Pareto Approach to Welfare Comparison
8.2 The SocialWelfare Approach to Welfare Comparison
8.3 The SocialUtility Approach to Welfare Comparison
8.4 The Lumpsum Compensation Approach to Welfare Comparison
8.5 The ConsumptionTaXation Compensation Approach to
Welfare Comparison
8.6 Comparing Different Approaches to Measuring Welfare
8.7 The Core Theorems of Welfare Economics in International
Trade
8.8 Welfare of a Single Economy: The Case of Free Trade
8.9 Welfare of a Single Economy: The Case of Restricted Trade
8.10 Welfare of the World
9 Gains from Trade for Economies with Imperfections
9.1 EXternal Economies of Scale
9.2 Monopolistic Competition with Differentiated Products
9.3 Oligopoly with Identical Products
9.4 ParetoInferior Trade When Markets are Incomplete
9.5 Gain from Compensated Trade with Incomplete Markets
9.6 ParetoInferior Trade with Overlapping Generations
9.7 Gain from Compensated Trade with Overlapping Generations
V TRADE POLICIES
10 Theory of Distortions and Optimal Policy
Intervention
10.1 A Planner's Problem
10.2 Optimality of a Competitive Equilibrium
10.3 Types of Distortions
10.4 Optimal Policy Intervention
10.5 Theory of Second Best and Piecemeal Policy Recommendations
10.6 Immiserizing Growth
10.7 EXternal Economies of Scale
10.8 Monopolistic Competition and Differentiated Products
11 Commercial Policies with Trade in Goods and Factor
Mobility
11.1 Effects of Protection
11.2 Optimal Protection
11.3 Can Optimal TaXes Be Negative?
11.4 An Alternative Approach to Analyzing Protection
11.5 Capital Movement under Optimal Goods Trade
11.6 Capital Movement for a Large Open Economy under Free
Trade in Goods
11.7 Capital Movement for a Small, Protected Economy
11.8 Choosing between Capital Mobility and Labor Mobility:
DutyFree Zones
12 Strategic Trade Policies
12.1 Optimal Policies in the Presence of Oligopolistic Industries
12.2 Policies for the Home Market
12.3 Policies for the Foreign Market
12.4 Some EXtensions
12.5 Further Arguments against EXport Subsidies
12.6 Nonequivalence of Tariffs and Quotas
12.7 Voluntary EXport Restraints and Oligopolistic Firms
12.8 Retaliation and Trade War with Competitive Industries
12.9 Retaliation and Trade War with Oligopolistic Industries
12.10 Alternatives to Trade Wars
12.11 Strategic Choice between Capital Mobility and Labor
Mobility
AppendiX
VI SPECIAL TOPICS
13 The Multinational Corporation
13.1 Some Basic Concepts
13.2 Ownership Advantages
13.3 Choosing between EXport and Foreign Direct Investment?
13.4 TariffJumping FDI
13.5 To Invest or to License: The Theory of Internalization
13.6 Quid Pro Quo Direct Investment: The PoliticalEconomy
ConteXt
13.7 Multinational Corporations and Market Power
13.8 Technology Transfer and Diffusion
14 International Labor Migration
14.1 Features of International Labor Migration
14.2 Emigration and the Welfare of Those Left Behind
14.3 Emigration with Constant Factor Prices
14.4 Government Policies in the Presence of Permanent Emigration
14.5 EXternal Effects
14.6 Temporary Migration and Guest Workers
14.7 The Problem of Brain Drain
14.8 Learning by Doing and International Migration
14.9 Education, Human Capital Formation, and International
Migration
14.10 Illegal Migration
References
IndeX

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