Lectures on International Trade / Edition 2

Lectures on International Trade / Edition 2

by Jagdish Bhagwati, Arvind Panagariya, T. N. Srinivasan
     
 

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ISBN-10: 0262024438

ISBN-13: 9780262024433

Pub. Date: 10/02/1998

Publisher: MIT Press

This textbook by two eminent theorists of international trade presents the most integrated and ambitious treatment of the subject available to date. It has evolved over several years of lectures to graduate students at major campuses such as MIT, Yale, and Columbia. While it is primarily addressed to graduate-level courses, it can also be easily adapted to upper-level

Overview

This textbook by two eminent theorists of international trade presents the most integrated and ambitious treatment of the subject available to date. It has evolved over several years of lectures to graduate students at major campuses such as MIT, Yale, and Columbia. While it is primarily addressed to graduate-level courses, it can also be easily adapted to upper-level undergraduate use, since the exposition starts from basic principles. Intuitive, geometric, and mathematical arguments are judiciously combined in a masterly treatment that makes this a unique and authoritative text in the field.

The book concerns pure rather than monetary theory, and its thirty-four chapters are organized into four parts. The first develops alternative models and theories explaining the trade pattern. The second is addressed to tariffs, quotas, and transfers. The third develops the theory of trade and welfare. The topics include gain from trade, theory of distortions and policy intervention, immiserizing growth, customs unions, DUP activities, international capital flows and migration. The final part treats other threshold topics such as trade and growth, two-ness and duality, cost-benefit analysis and uncertainty.

Jagdish N. Bhagwati is Arthur Lehman Professor of Economics and Director, International Economics Research Center, at Columbia University. Among his books are International Trade: Selected Readings (MIT Press, 1981) which complements and can be effectively used with this new text. T.N. Srinivasan is Samuel C. Park Jr. Professor of Economics at Yale University.

Product Details

ISBN-13:
9780262024433
Publisher:
MIT Press
Publication date:
10/02/1998
Edition description:
Subsequent
Pages:
614
Product dimensions:
7.48(w) x 10.34(h) x 1.64(d)

Table of Contents

Preface to the Second Edition
1 Introduction
1.1 Pure Theory of Trade
1.2 Distinguishing Features of International Trade Theory
1.3 Positive and Normative Aspects
1.4 Organization of the Volume
1.5 Standardized Notation
I THEORIES OF INTERNATIONAL TRADE
2 Model and Analytic Relationships in Ricardian
Theory
2.1 Ricardian Model
2.2 Supply Relations
2.3 SelfSufficiency Equilibrium
2.4 Trade Equilibrium and Offer Curves
2.5 TradeIndifference Curves
2.6 Formal Notes on the Ricardian Model
3 Ricardian Theory and the Pattern of Trade
3.1 Alternative Demand Assumptions
3.2 Weaker Formulation of Ricardian Theorem
4 Some EXtensions of Ricardian Theory
4.1 Multiple Countries
4.2 Multiple Goods
4.3 Transportation Costs
4.4 Tariffs
4.5 Nontraded Goods
4.6 ContinuumofGoods Model
5 Model and Analytic Relationships under the
HeckscherOhlin Theory
5.1 HeckscherOhlin Model
5.2 Supply Relations
5.3 Competitive System
5.4 Depiction of FreeTrade Equilibrium
6 Pattern of Trade and the HeckscherOhlin Theory
6.1 HeckscherOhlin Theorem with Physical Definition of Factor
Abundance
6.2 HeckscherOhlin Theorem with Price Definition of Factor
Abundance
6.3 FactorPrice Equalization
7 SpecificFactors Model
7.1 SpecificFactors Model: Basic Analysis
7.2 Comparative Statics: A Change in Goods Prices
7.3 Comparative Statics: A Change in Factor Endowments
7.4 Interpreting the SF Model as the ShortRun Version of the 2X2
Model
7.5 Source of Factor Specificity and the Choice of a Model
8 Generalizations and Empirical Verification of the
HeckscherOhlin Theory
8.1 Many Goods, Two Factors
8.2Two Goods, Many Factors
8.3 Many Goods and Many Factors
8.4 Empirical Verification of the HeckscherOhlin Theory
9 Dual Approach: Basic Tools
9.1 Envelope Theorem and Envelope Function
9.2 UnitCost Function
9.3 Revenue Function
9.4 EXpenditure Function
9.5 Equilibrium
9.6 Trade Elasticities and Stability in a TwoGood Model
10 Mathematical Analysis of the 2X2 and 2X3 Models
10.1 The 2X2 Model
10.2 The 2X3 SpecificFactors Model
10.3 Dynamic Adjustment with Adjustment Costs
11 Economies of Scale
11.1 Models of Perfect Competition
11.2 Models of Monopolistic Competition
II TRADE INTERVENTIONS AND TRANSFERS
12 Tariffs and Trade Equilibrium
12.1 FreeTrade Version of the Classical Model
12.2 Effect of a Tariff on EXternal and Domestic Terms of Trade
12.3 Geometry of Tariffs
12.4 Metzler ParadoX
12.5 Some EXtensions: Metzler Production ParadoX
12.6 Lerner Symmetry Theorem
13 Tariffs versus Quotas
13.1 Equivalence Argument
13.2 Breakdown of Equivalence
13.3 An Alternative Question
13.4 Applications of Analysis to Other Forms of Tariffs and Quotas
14 Other Commercial Policy Instruments
14.1 Voluntary EXport Restraints
14.2 Voluntary Import EXpansions
14.3 Antidumping Actions
15 Effective Rate of Protection
15.1 Two Definitions
15.2 Predictive Power of ERP IndeXes
16 Transfer Problem
16.1 Direct Solution
16.2 TwoStage Derivation
16.3 Welfare Impact
16.4 Immiserizing Transfers: Other Models
16.5 Transfer Criteria in Other Models
III TRADE AND WELFARE IN AN OPEN ECONOMY
17 Principal Issues and Policy Instruments
17.1 Major Concepts and Distinctions
17.2 Alternative Policy Instruments and Hierarchy of Policies
18 Gains from Trade
18.1 Basic Theorem without Prices
18.2 Basic Theorem with Prices
18.3 Optimality of FreeTrade Policy for a Small Country
18.4 Optimality of Free Trade from World Viewpoint
18.5 Superiority of Trade over Autarky, without LumpSum Transfers
18.6 Illustrating the DiXitNorman Argument
19 Measuring Gains from Trade
19.1 Gains from Free Trade
19.2 Decomposing Gains from Trade
19.3 Factor Immobility
19.4 Other Considerations
20 Distortions: Departures from FreeTrade
Optimality
21 Monopoly Power in Trade
21.1 Optimal Policy Intervention
21.2 Tariff Level
21.3 Can the Optimal Tariff Be Negative?
21.4 Optimal Tariff Structure with Several Traded Goods
21.5 Retaliation or EXtortion
21.6 Ranking Alternative Policies
22 Production EXternalities
23 Monopoly in Production
23.1 Nontangency
23.2 Welfare Analysis
23.3 Gains from Trade
24 Monopsony
24.1 Positive Analysis of Monopsony Distortion
24.2 Welfare Implications
25 Wage Differentials
25.1 Nature of the Distortion
25.2 Analysis
26 Generalized Sticky Wages
26.1 OneGood Model with Sticky Wage
26.2 TwoGood Model with Factor Immobility
26.3 Generalized Sticky Wage with Full Factor Mobility in 2X2
Model
27 SectorSpecific Sticky Wages
27.1 HarrisTodaro Model
27.2 Policy Implications
27.3 Other EXtensions
28 Noneconomic Objectives
28.1 Different Objectives
28.2 Formal Mathematics of the Problem
28.3 Turning Noneconomic Objectives into Economic Objectives
29 Immiserizing Growth
29.1 Original Case
29.2 Immiserizing Growth for a Small Country with a Tariff
29.3 Generalized Theory
29.4 Two Caveats
29.5 Diverse Applications of ImmiserizingGrowth Theory
29.6 Algebra of the Bhagwati and the Johnson Cases
30 Imperfect Competition and Trade Policy
30.1 Oligopoly: Competition in the ThirdCountry Market
30.2 Oligopoly in TwoCountry Models
30.3 Monopolitic Competition
31 Uniform versus Preferential Tariff Reduction
31.1 Uniform Reduction
31.2 Preferential Reduction
31.3 Recent Static Analysis
31.4 Recent "Dynamic TimePath" Analyses
32 International Capital Flows
32.1 GoodsPrice Equalization: Turning FactorPrice Equalization
on its Head
32.2 Diversification with Different Technologies
32.3 Welfare Analysis: Inflows without Optimal Policy Intervention
32.4 Welfare Analysis: Optimal and SecondBest Interventions
32.5 Other WelfareTheoretic Questions
33 International Migration
33.1 Asymmetries
33.2 Choice between International Labor and Capital Mobility
33.3 Response to Import Competition
IV RECENT THEORETICAL DEVELOPMEMTS
34 Directly Unproductive ProfitSeeking (DUP)
Activities
34.1 Tariff Evasion
34.2 Revenue Seeking
34.3 Tariff Seeking
34.4 General Theory of DUP Activities
34.5 Price versus Quantity Distortions
35 Trade Reform
35.1 Normative Analysis
35.2 Positive Analysis
36 Growth and Welfare
36.1 Distortionary Situations
36.2 Optimal Policies Everywhere: Absence of Deadweight Loss under
Free Trade
36.3 Steady States, Trade, and Welfare
37 Endogenous Growth, Innovation, and Trade
37.1 Endogenous Growth and Trade
37.2 InnovationBased Growth and Technology Diffusion among
Countries
38 Shadow Prices for Project Selection in Open
Economies
38.1 "WorldPrice"Valuation Rule
38.2 Derivation of WorldPriceValuation Shadow Prices with Given
Distortion
38.3 Negative Shadow Prices
38.4 Other Issues and EXtensions
39 Uncertainty
39.1 Ricardian Model for Complete Set of Markets
39.2 Ricardian Model for Securities and Spot Markets
39.3 Ricardian Model for Equivalence of World Market with
Securities Market and with Complete Set of Markets
39.4 Models with an Incomplete Set of Markets
AppendiXes
A Alternative Elasticity Formulas
B Basic Results of the 2X2 Neoclassical Model of Trade
Theory
C Classical ComparativeStatics Model and Analytical
Relationships
IndeX

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