International Economics

Dominick Salvatore (Autor)

Buch | Hardcover

832 Seiten

2013 | 11th edition
John Wiley & Sons Inc (Verlag)
978-1-118-17793-8 (ISBN)

Infos

Salvatore’s International Economics provides information about fundamental institutions and relationships that affect quality of life, and provides a framework for thinking through and understanding the process of decision making. Furthermore, the text is designed as a primary text for an introduction to basic economics or principles of economics and offers a balanced presentation of macroeconomics and microeconomics.



A must-have for business professionals, this book presents a comprehensive, up-to-date, and clear exposition of the theory and principles of international economics.
Provides information about fundamental institutions and relationships that affect quality of life, and provides a framework for thinking through and understanding the process of decision making.
Designed as a primary text for an introduction to basic economics or principles of economics and offers a balanced presentation of macroeconomics and microeconomics.

Inhalt

1 Introduction 1

1.1 The Globalization of the World Economy 1

1.1A We Live in a Global Economy 1

CASE STUDY1-1 The Dell PCs, iPhones, and iPads Sold in the United States Are Anything but American! 2

 CASE STUDY1-2 What Is an “American” Car? 3

1.1B The Globalization Challenge 3

CASE STUDY1-3 Is India’s Globalization Harming the United States? 5

1.2 International Trade and the Nation’s Standard of Living 6

CASE STUDY1-4 Rising Importance of International Trade to the United States 8

1.3 The International Flow of Goods, Services, Labor, and Capital 9

1.3A The International Flow of Goods and Services: The Gravity Model 9

1.3B The International Flow of Labor and Capital 10

CASE STUDY1-5 Major Net Exporters and Importers of Capital 11

1.4 International Economic Theories and Policies 11

1.4A Purpose of International Economic Theories and Policies 11

1.4B The Subject Matter of International Economics 12

1.5 Current International Economic Problems and Challenges 13

1.6 Organization and Methodology of the Text 15

1.6A Organization of the Text 15

1.6B Methodology of the Text 16

Summary 17

A Look Ahead 18

Key Terms 18

Questions for Review 18

Problems 19

A1.1 Basic International Trade Data 20

A1.2 Sources of Additional International Data and Information 24

Selected Bibliography 26

INTERNet 28

Part 1 International Trade Theory

2 The Law of Comparative Advantage 31

2.1 Introduction 31

2.2 The Mercantilists’ Views on Trade 32

CASE STUDY2-1 Munn’s Mercantilistic Views on Trade 33

CASE STUDY2-2 Mercantilism Is Alive and Well in the Twenty-first Century 33

2.3 Trade Based on Absolute Advantage: Adam Smith 34

2.3A Absolute Advantage 34

2.3B Illustration of Absolute Advantage 35

2.4 Trade Based on Comparative Advantage: David Ricardo 36

2.4A The Law of Comparative Advantage 36

2.4B The Gains from Trade 37

2.4C The Case of No Comparative Advantage 39

2.4D Comparative Advantage with Money 39

CASE STUDY2-3 The Petition of the Candlemakers 41

2.5 Comparative Advantage and Opportunity Costs 41

2.5A Comparative Advantage and the Labor Theory of Value 41

2.5B The Opportunity Cost Theory 42

2.5C The Production Possibility Frontier under Constant Costs 42

2.5D Opportunity Costs and Relative Commodity Prices 44

2.6 The Basis for and the Gains from Trade under Constant Costs 45

2.6A Illustration of the Gains from Trade 45

2.6B Relative Commodity Prices with Trade 46

2.7 Empirical Tests of the Ricardian Model 47

CASE STUDY2-4 Relative Unit Labor Costs and Relative Exports—United States and Japan 49

Summary 50

A Look Ahead 51

Key Terms 51

Questions for Review 51

Problems 52

A2.1 Comparative Advantage with More Than Two Commodities 54

A2.2 Comparative Advantage with More Than Two Nations 55

Selected Bibliography 56

INTERNet 56

3 The Standard Theory of International Trade 57

3.1 Introduction 57

3.2 The Production Frontier with Increasing Costs 58

3.2A Illustration of Increasing Costs 58

3.2B The Marginal Rate of Transformation 59

3.2C Reasons for Increasing Opportunity Costs and Different Production Frontiers 59

3.3 Community Indifference Curves 60

3.3A Illustration of Community Indifference Curves 60

3.3B The Marginal Rate of Substitution 61

3.3C Some Difficulties with Community Indifference Curves 61

3.4 Equilibrium in Isolation 62

3.4A Illustration of Equilibrium in Isolation 62

3.4B Equilibrium-Relative Commodity Prices and Comparative Advantage 63

CASE STUDY3-1 Comparative Advantage of the Largest Advanced and Emerging Economies 64

3.5 The Basis for and the Gains from Trade with Increasing Costs 64

3.5A Illustrations of the Basis for and the Gains from Trade with Increasing Costs 65

3.5B Equilibrium-Relative Commodity Prices with Trade 66

3.5C Incomplete Specialization 67

CASE STUDY3-2 Specialization and Export Concentration in Selected Countries 67

3.5D Small-Country Case with Increasing Costs 69

3.5E The Gains from Exchange and from Specialization 69

CASE STUDY3-3 Job Losses in High U.S. Import-Competing Industries 70

CASE STUDY3-4 International Trade and Deindustrialization in the United States, the European Union, and Japan 71

3.6 Trade Based on Differences in Tastes 72

3.6A Illustration of Trade Based on Differences in Tastes 72

Summary 73

A Look Ahead 74

Key Terms 74

Questions for Review 74

Problems 75

A3.1 Production Functions, Isoquants, Isocosts, and Equilibrium 76

A3.2 Production Theory with Two Nations, Two Commodities, and Two Factors 78

A3.3 Derivation of the Edgeworth Box Diagram and Production Frontiers 79

A3.4 Some Important Conclusions 82

Selected Bibliography 83

INTERNet 84

4 Demand and Supply, Offer Curves, and the Terms of Trade 85

4.1 Introduction 85

4.2 The Equilibrium-Relative Commodity Price with Trade—Partial Equilibrium Analysis 86

CASE STUDY4-1 Demand, Supply, and the International Price of Petroleum 87

CASE STUDY4-2 The Index of Export to Import Prices for the United States 88

4.3 Offer Curves 89

4.3A Origin and Definition of Offer Curves 89

4.3B Derivation and Shape of the Offer Curve of Nation 1 89

4.3C Derivation and Shape of the Offer Curve of Nation 2 90

4.4 The Equilibrium-Relative Commodity Price with Trade—General Equilibrium Analysis 91

4.5 Relationship between General and Partial Equilibrium Analyses 93

4.6 The Terms of Trade 94

4.6A Definition and Measurement of the Terms of Trade 94

4.6B Illustration of the Terms of Trade 95

CASE STUDY4-3 The Terms of Trade of the G-7 Countries 95

CASE STUDY4-4 The Terms of Trade of Advanced and Developing Countries 96

4.6C Usefulness of the Model 96

Summary 97

A Look Ahead 98

Key Terms 98

Questions for Review 98

Problems 98

A4.1 Derivation of a Trade Indifference Curve for Nation 1 100

A4.2 Derivation of Nation 1’s Trade Indifference Map 100

A4.3 Formal Derivation of Nation 1’s Offer Curve 101

A4.4 Outline of the Formal Derivation of Nation 2’s Offer Curve 104

A4.5 General Equilibrium of Production, Consumption, and Trade 104

A4.6 Multiple and Unstable Equilibria 107

Selected Bibliography 108

INTERNet 108

5 Factor Endowments and the Heckscher–Ohlin Theory 109

5.1 Introduction 109

5.2 Assumptions of the Theory 110

5.2A The Assumptions 110

5.2B Meaning of the Assumptions 110

5.3 Factor Intensity, Factor Abundance, and the Shape of the Production Frontier 112

5.3A Factor Intensity 112

5.3B Factor Abundance 114

5.3C Factor Abundance and the Shape of the Production Frontier 115

CASE STUDY5-1 Relative Resource Endowments of Various Countries 116

CASE STUDY5-2 Capital–Labor Ratios of Selected Countries 117

5.4 Factor Endowments and the Heckscher–Ohlin Theory 118

5.4A The Heckscher–Ohlin Theorem 118

5.4B General Equilibrium Framework of the Heckscher–Ohlin Theory 119

5.4C Illustration of the Heckscher–Ohlin Theory 120

CASE STUDY5-3 Classification of Major Product Categories in Terms of Factor Intensity 122

CASE STUDY5-4 The Factor Intensity of Trade of Various Countries 122

5.5 Factor–Price Equalization and Income Distribution 123

5.5A The Factor–Price Equalization Theorem 124

5.5B Relative and Absolute Factor–Price Equalization 125

5.5C Effect of Trade on the Distribution of Income 126

CASE STUDY5-5 Has International Trade Increased U.S. Wage Inequalities? 127

5.5D The Specific-Factors Model 128

5.5E Empirical Relevance 129

CASE STUDY5-6 Convergence of Real Wages among Industrial Countries 130

5.6 Empirical Tests of the Heckscher–Ohlin Model 131

5.6A Empirical Results—The Leontief Paradox 131

CASE STUDY5-7 Capital and Labor Requirements in U.S. Trade 132

5.6B Explanations of the Leontief Paradox and Other Empirical Tests of the H–O Model 133

CASE STUDY5-8 The H–O Model with Skills and Land 135

5.6C Factor-Intensity Reversal 137

Summary 138

A Look Ahead 139

Key Terms 139

Questions for Review 139

Problems 140

A5.1 The Edgeworth Box Diagram for Nation 1 and Nation 2 142

A5.2 Relative Factor–Price Equalization 142

A5.3 Absolute Factor–Price Equalization 145

A5.4 Effect of Trade on the Short-Run Distribution of Income: The Specific-Factors Model 146

A5.5 Illustration of Factor-Intensity Reversal 148

A5.6 The Elasticity of Substitution and Factor-Intensity Reversal 150

A5.7 Empirical Tests of Factor-Intensity Reversal 151

Selected Bibliography 151

INTERNet 155

6 Economies of Scale, Imperfect Competition, and International Trade157

6.1 Introduction 157

6.2 The Heckscher–Ohlin Model and New Trade Theories 158

6.3 Economies of Scale and International Trade 159

CASE STUDY6-1 The New International Economies of Scale 161

CASE STUDY6-2 Job Loss Rates in U.S. Industries and Globalization 162

6.4 Imperfect Competition and International Trade 163

6.4A Trade Based on Product Differentiation 163

CASE STUDY6-3 U.S. Intra-Industry Trade in Automotive Products 163

CASE STUDY6-4 Variety Gains with International Trade 165

6.4B Measuring Intra-Industry Trade 167

CASE STUDY6-5 Growth of Intra-Industry Trade 167

CASE STUDY6-6 Intra-Industry Trade Indexes for G-20 Countries 168

6.4C Formal Model of Intra-Industry Trade 169

6.4D Another Version of the Intra-Industry Trade Model 170

6.5 Trade Based on Dynamic Technological Differences 172

6.5A Technological Gap and Product Cycle Models 172

6.5B Illustration of the Product Cycle Model 173

CASE STUDY6-7 The United States as the Most Competitive Economy 175

6.6 Costs of Transportation, Environmental Standards, and International Trade 175

6.6A Costs of Transportation and Nontraded Commodities 175

6.6B Costs of Transportation and the Location of Industry 177

6.6C Environmental Standards, Industry Location, and International Trade 178

CASE STUDY6-8 Environmental Performance Index 179

Summary 179

A Look Ahead 180

Key Terms 180

Questions for Review 181

Problems 181

A6.1 External Economies and the Pattern of Trade 182

A6.2 Dynamic External Economies and Specialization 184

Selected Bibliography 185

INTERNet 187

7 Economic Growth and International Trade 189

7.1 Introduction 189

7.2 Growth of Factors of Production 190

7.2A Labor Growth and Capital Accumulation over Time 190

7.2B The Rybczynski Theorem 192

7.3 Technical Progress 193

7.3A Neutral, Labor-Saving, and Capital-Saving Technical Progress 193

7.3B Technical Progress and the Nation’s Production Frontier 194

CASE STUDY7-1 Growth in the Capital Stock per Worker of Selected Countries 195

7.4 Growth and Trade: The Small-Country Case 196

7.4A The Effect of Growth on Trade 196

7.4B Illustration of Factor Growth, Trade, and Welfare 197

7.4C Technical Progress, Trade, and Welfare 199

CASE STUDY7-2 Growth in Output per Worker from Capital Deepening, Technological Change, and Improvements in Efficiency 200

7.5 Growth and Trade: The Large-Country Case 201

7.5A Growth and the Nation’s Terms of Trade and Welfare 201

7.5B Immiserizing Growth 202

7.5C Illustration of Beneficial Growth and Trade 203

CASE STUDY7-3 Growth and the Emergence of New Economic Giants 205

7.6 Growth, Change in Tastes, and Trade in Both Nations 206

7.6A Growth and Trade in Both Nations 206

7.6B Change in Tastes and Trade in Both Nations 208

CASE STUDY7-4 Growth, Trade, and Welfare in the Leading Industrial Countries 208

Summary 209

A Look Ahead 210

Key Terms 210

Questions for Review 211

Problems 211

A7.1 Formal Proof of the Rybczynski Theorem 212

A7.2 Growth with Factor Immobility 214

A7.3 Graphical Analysis of Hicksian Technical Progress 216

Selected Bibliography 217

INTERNet 218

Part 2 International Trade Policy

8 Trade Restrictions: Tariffs 221

8.1 Introduction 221

CASE STUDY8-1 Average Tariff on Nonagricultural Products in Major Developed Countries 222

CASE STUDY8-2 Average Tariffs on Nonagricultural Products in Some Major Developing Countries 223

8.2 Partial Equilibrium Analysis of a Tariff 223

8.2A Partial Equilibrium Effects of a Tariff 224

8.2B Effect of a Tariff on Consumer and Producer Surplus 225

8.2C Costs and Benefits of a Tariff 226

CASE STUDY8-3 The Welfare Effect of Liberalizing Trade on Some U.S. Products 227

CASE STUDY8-4 The Welfare Effect of Liberalizing Trade on Some EU Products 228

8.3 The Theory of Tariff Structure 229

8.3A The Rate of Effective Protection 229

8.3B Generalization and Evaluation of the Theory of Effective Protection 231

CASE STUDY8-5 Rising Tariff Rates with Degree of Domestic Processing 232

CASE STUDY8-6 Structure of Tariffs on Industrial Products in the United States, the European Union, Japan, and Canada 232

8.4 General Equilibrium Analysis of a Tariff in a Small Country 234

8.4A General Equilibrium Effects of a Tariff in a Small Country 234

8.4B Illustration of the Effects of a Tariff in a Small Country 235

8.4C The Stolper–Samuelson Theorem 236

8.5 General Equilibrium Analysis of a Tariff in a Large Country 237

8.5A General Equilibrium Effects of a Tariff in a Large Country 237

8.5B Illustration of the Effects of a Tariff in a Large Country 238

8.6 The Optimum Tariff 239

8.6A The Meaning of the Concept of Optimum Tariff and Retaliation 239

8.6B Illustration of the Optimum Tariff and Retaliation 240

Summary 241

A Look Ahead 242

Key Terms 242

Questions for Review 243

Problems 243

A8.1 Partial Equilibrium Effects of a Tariff in a Large Nation 244

A8.2 Derivation of the Formula for the Rate of Effective Protection 247

A8.3 The Stolper–Samuelson Theorem Graphically 248

A8.4 Exception to the Stolper–Samuelson Theorem—The Metzler Paradox 250

A8.5 Short-Run Effect of a Tariff on Factors’ Income 251

A8.6 Measurement of the Optimum Tariff 252

Selected Bibliography 254

INTERNet 256

9 Nontariff Trade Barriers and the New Protectionism 257

9.1 Introduction 257

9.2 Import Quotas 258

9.2A Effects of an Import Quota 258

CASE STUDY9-1 The Economic Effects of the U.S. Quota on Sugar Imports 259

9.2B Comparison of an Import Quota to an Import Tariff 260

9.3 Other Nontariff Barriers and the New Protectionism 260

9.3A Voluntary Export Restraints 261

CASE STUDY9-2 Voluntary Export Restraints (VERs) on Japanese Automobiles to the United States and Europe 261

9.3B Technical, Administrative, and Other Regulations 262

9.3C International Cartels 263

9.3D Dumping 264

9.3E Export Subsidies 266

CASE STUDY9-3 Antidumping Investigations by G20 Members 266

CASE STUDY9-4 Agricultural Subsidies in OECD Countries 267

CASE STUDY9-5 Pervasiveness of Nontariff Barriers 268

9.3F Analysis of Export Subsidies 269

9.4 The Political Economy of Protectionism 270

9.4A Fallacious and Questionable Arguments for Protection 270

9.4B The Infant-Industry and Other Qualified Arguments for Protection 271

9.4C Who Gets Protected? 272

CASE STUDY9-6 Benefits to the World Economy from Complete Trade Liberalization 273

9.5 Strategic Trade and Industrial Policies 274

9.5A Strategic Trade Policy 274

9.5B Strategic Trade and Industrial Policies with Game Theory 275

9.5C The U.S. Response to Foreign Industrial Targeting and Strategic Trade Policies 277

9.6 History of U.S. Commercial Policy 278

9.6A The Trade Agreements Act of 1934 278

9.6B The General Agreement on Tariffs and Trade (GATT) 279

9.6C The 1962 Trade Expansion Act and the Kennedy Round 280

9.6D The Trade Reform Act of 1974 and the Tokyo Round 280

9.6E The 1984 and 1988 Trade Acts 281

9.7 The Uruguay Round, Outstanding Trade Problems, and the Doha Round 282

9.7A The Uruguay Round 283

CASE STUDY9-7 Gains from the Uruguay Round 285

CASE STUDY9-8 The Multilateral Rounds of Trade Negotiations 286

9.7B Outstanding Trade Problems and the Doha Round 286

CASE STUDY9-9 Benefits from a Likely Doha Scenario 288

Summary 288

A Look Ahead 290

Key Terms 290

Questions for Review 290

Problems 291

A9.1 Centralized Cartels 292

A9.2 International Price Discrimination 293

A9.3 Tariffs, Subsidies, and Domestic Goals 294

Selected Bibliography 295

INTERNet 299

10 Economic Integration: Customs Unions and Free Trade Areas 301

10.1 Introduction 301

10.2 Trade-Creating Customs Union 302

10.2A Trade Creation 302

10.2B Illustration of a Trade-Creating Customs Union 303

10.3 Trade-Diverting Customs Unions 304

10.3A Trade Diversion 304

10.3B Illustration of a Trade-Diverting Customs Union 304

10.4 The Theory of the Second Best and Other Static Welfare Effects of Customs Unions 306

10.4A The Theory of the Second Best 306

10.4B Conditions More Likely to Lead to Increased Welfare 307

10.4C Other Static Welfare Effects of Customs Unions 307

10.5 Dynamic Benefits from Customs Unions 308

10.6 History of Attempts at Economic Integration 309

10.6A The European Union 309

CASE STUDY10-1 Economic Profile of the EU, NAFTA, and Japan 310

CASE STUDY10-2 Gains from the Single EU Market 311

10.6B The European Free Trade Association 312

10.6C The North American and Other Free Trade Agreements 313

CASE STUDY10-3 Mexico’s Gains from NAFTA—Expectations and Outcome 315

10.6D Attempts at Economic Integration among Developing Countries 316

CASE STUDY10-4 Economic Profile of Mercosur 317

10.6E Economic Integration in Central and Eastern Europe and in the Former Soviet Republics 318

CASE STUDY10-5 Changes in Trade Patterns with Economic Integration 319

Summary 321

A Look Ahead 322

Key Terms 322

Questions for Review 322

Problems 323

A10.1 General Equilibrium Analysis of the Static Effects of a Trade-Diverting Customs Union 324

A10.2 Regional Trade Agreements Around the World 325

Selected Bibliography 327

INTERNet 330

11 International Trade and Economic Development 331

11.1 Introduction 331

11.2 The Importance of Trade to Development 332

11.2A Trade Theory and Economic Development 332

11.2B Trade as an Engine of Growth 333

11.2C The Contributions of Trade to Development 335

11.2D International Trade and Endogenous Growth Theory 336

CASE STUDY11-1 The East Asian Miracle of Growth and Trade 337

11.3 The Terms of Trade and Economic Development 338

11.3A The Various Terms of Trade 338

11.3B Alleged Reasons for Deterioration in the Commodity Terms of Trade 339

11.3C Historical Movement in the Commodity and Income Terms of Trade 340

CASE STUDY11-2 Change in Commodity Prices over Time 342

11.4 Export Instability and Economic Development 343

11.4A Cause and Effects of Export Instability 343

11.4B Measurements of Export Instability and Its Effect on Development 344

11.4C International Commodity Agreements 345

11.5 Import Substitution versus Export Orientation 346

11.5A Development through Import Substitution versus Exports 346

11.5B Experience with Import Substitution 348

CASE STUDY11-3 The Growth of GDP of Rich Countries, Globalizers, and Nonglobalizers 348

11.5C Trade Liberalization and Growth in Developing Countries 349

CASE STUDY11-4 Manufactures in Total Exports of Selected Developing Countries 350

11.6 Current Problems Facing Developing Countries 351

11.6A Poverty in Developing Countries 351

11.6B The Foreign Debt Problem of Developing Countries 353

CASE STUDY11-5 The Foreign Debt Burden of Developing Countries 353

11.6C Trade Problems of Developing Countries 354

CASE STUDY11-6 Globalization and World Poverty 355

Summary 356

A Look Ahead 357

Key Terms 357

Questions for Review 357

Problems 358

A11.1 Income Inequalities by Traditional and Purchasing-Power Parity (PPP) Measures 359

Selected Bibliography 360

INTERNet 365

12 International Resource Movements and Multinational Corporations 367

12.1 Introduction 367

12.2 Some Data on International Capital Flows 368

CASE STUDY12-1 Fluctuations in Foreign Direct Investment Flows to the United States 370

12.3 Motives for International Capital Flows 371

12.3A Motives for International Portfolio Investments 371

12.3B Motives for Direct Foreign Investments 373

12.4 Welfare Effects of International Capital Flows 374

CASE STUDY12-2 The Stock of Foreign Direct Investments Around the World 374

12.4A Effects on the Investing and Host Countries 375

12.4B Other Effects on the Investing and Host Countries 377

12.5 Multinational Corporations 378

12.5A Reasons for the Existence of Multinational Corporations 378

12.5B Problems Created by Multinational Corporations in the Home Country 379

CASE STUDY12-3 The World’s Largest Nonpetroleum, Industrial Corporations 380

CASE STUDY12-4 Employment of U.S. MNCs Abroad 381

12.5C Problems Created by Multinational Corporations in the Host Country 382

12.6 Motives for and Welfare Effects of International Labor Migration 383

12.6A Motives for International Labor Migration 383

12.6B Welfare Effects of International Labor Migration 384

12.6C Other Welfare Effects of International Labor Migration 385

CASE STUDY12-5 U.S. Immigration and Debate over Immigration Policy 387

Summary 388

A Look Ahead 389

Key Terms 389

Questions for Review 389

Problems 390

A12.1 The Transfer Problem 390

Selected Bibliography 391

INTERNet 393

Part 3 The Balance of Payments, Foreign Exchange Markets, and Exchange Rates

13 Balance of Payments 397

13.1 Introduction 397

13.2 Balance-of-Payments Accounting Principles 398

13.2A Credits and Debits 398

13.2B Double-Entry Bookkeeping 399

13.3 The International Transactions of the United States 401

CASE STUDY13-1 The Major Goods Exports and Imports of the United States 403

13.4 Accounting Balances and the Balance of Payments 405

13.5 The Postwar Balance of Payments of the United States 407

CASE STUDY13-2 The Major Trade Partners of the United States 409

CASE STUDY13-3 The U.S. Trade Deficit with Japan 410

CASE STUDY13-4 The Exploding U.S. Trade Deficit with China 411

13.6 The International Investment Position of the United States 412

CASE STUDY13-5 The United States as a Debtor Nation 414

Summary 415

A Look Ahead 415

Key Terms 416

Questions for Review 416

Problems 417

A13.1 The IMF Method of Reporting International Transactions 418

Selected Bibliography 421

INTERNet 422

14 Foreign Exchange Markets and Exchange Rates 423

14.1 Introduction 423

14.2 Functions of the Foreign Exchange Markets 423

CASE STUDY14-1 The U.S. Dollar as the Dominant International Currency 425

CASE STUDY14-2 The Birth of a New Currency: The Euro 427

14.3 Foreign Exchange Rates 427

14.3A Equilibrium Foreign Exchange Rates 427

CASE STUDY14-3 Foreign Exchange Quotations 430

14.3B Arbitrage 431

14.3C The Exchange Rate and the Balance of Payments 432

14.4 Spot and Forward Rates, Currency Swaps, Futures, and Options 434

14.4A Spot and Forward Rates 434

14.4B Foreign Exchange Swaps 435

14.4C Foreign Exchange Futures and Options 436

CASE STUDY14-4 Size, Currency, and Geographic Distribution of the Foreign Exchange Market 437

14.5 Foreign Exchange Risks, Hedging, and Speculation 438

14.5A Foreign Exchange Risks 438

14.5B Hedging 441

14.5C Speculation 442

14.6 Interest Arbitrage and the Efficiency of Foreign Exchange Markets 444

14.6A Uncovered Interest Arbitrage 444

CASE STUDY14-5 Carry Trade 445

14.6B Covered Interest Arbitrage 446

14.6C Covered Interest Arbitrage Parity 447

14.6D Covered Interest Arbitrage Margin 449

14.6E Efficiency of Foreign Exchange Markets 450

14.7 Eurocurrency or Offshore Financial Markets 451

14.7A Description and Size of the Eurocurrency Market 451

14.7B Reasons for the Development and Growth of the Eurocurrency Market 452

CASE STUDY14-6 Size and Growth of Eurocurrency Market 453

14.7C Operation and Effects of the Eurocurrency Market 454

14.7D Eurobond and Euronote Markets 455

Summary 456

A Look Ahead 457

Key Terms 457

Questions for Review 457

Problems 458

A14.1 Derivation of the Formula for the Covered Interest Arbitrage Margin 459

Selected Bibliography 461

INTERNet 462

15 Exchange Rate Determination 463

15.1 Introduction 463

15.2 Purchasing-Power Parity Theory 464

15.2A Absolute Purchasing-Power Parity Theory 464

15.2B Relative Purchasing-Power Parity Theory 465

CASE STUDY15-1 Absolute Purchasing-Power Parity in the Real World 466

CASE STUDY15-2 The Big Mac Index and the Law of One Price 467

CASE STUDY15-3 Relative Purchasing-Power Parity in the Real World 469

15.2C Empirical Tests of the Purchasing-Power Parity Theory 470

15.3 Monetary Approach to the Balance of Payments and Exchange Rates 471

15.3A Monetary Approach under Fixed Exchange Rates 471

15.3B Monetary Approach under Flexible Exchange Rates 473

15.3C Monetary Approach to Exchange Rate Determination 475

CASE STUDY15-4 Monetary Growth and Inflation 476

CASE STUDY15-5 Nominal and Real Exchange Rates, and the Monetary Approach 477

15.3D Expectations, Interest Differentials, and Exchange Rates 478

CASE STUDY15-6 Interest Differentials, Exchange Rates, and the Monetary Approach 480

15.4 Portfolio Balance Model and Exchange Rates 480

15.4A Portfolio Balance Model 481

15.4B Extended Portfolio Balance Model 482

15.4C Portfolio Adjustments and Exchange Rates 484

15.5 Exchange Rate Dynamics 486

15.5A Exchange Rate Overshooting 486

15.5B Time Path to a New Equilibrium Exchange Rate 487

15.6 Empirical Tests of the Monetary and Portfolio Balance Models and Exchange Rate Forecasting 489

CASE STUDY15-7 Exchange Rate Overshooting of the U.S. Dollar 490

CASE STUDY15-8 The Euro Exchange Rate Defies Forecasts 491

Summary 493

A Look Ahead 494

Key Terms 494

Questions for Review 494

Problems 495

A15.1 Formal Monetary Approach Model 497

A15.2 Formal Portfolio Balance Model and Exchange Rates 498

Selected Bibliography 500

INTERNet 503

Part 4 Open-Economy Macroeconomics and the International Monetary System

16 The Price Adjustment Mechanism with Flexible and Fixed Exchange Rates 507

16.1 Introduction 507

16.2 Adjustment with Flexible Exchange Rates 508

16.2A Balance-of-Payments Adjustments with Exchange Rate Changes 508

16.2B Derivation of the Demand Curve for Foreign Exchange 509

16.2C Derivation of the Supply Curve for Foreign Exchange 511

16.3 Effect of Exchange Rate Changes on Domestic Prices and the Terms of Trade 512

CASE STUDY16-1 Currency Depreciation and Inflation in Developing Countries during the 1997–1998 East Asian Crisis 513

16.4 Stability of Foreign Exchange Markets 514

16.4A Stable and Unstable Foreign Exchange Markets 514

16.4B The Marshall–Lerner Condition 516

16.5 Elasticities in the Real World 517

16.5A Elasticity Estimates 517

16.5B The J-Curve Effect and Revised Elasticity Estimates 519

CASE STUDY16-2 Estimated Price Elasticities in International Trade 520

CASE STUDY16-3 Other Estimated Price Elasticities in International Trade 521

CASE STUDY16-4 Effective Exchange Rate of the Dollar and U.S. Current Account Balance 521

CASE STUDY16-5 Dollar Depreciation and the U.S. Current Account Balance 523

CASE STUDY16-6 Exchange Rates and Current Account Balances during the European Financial Crisis of the Early 1990s 524

16.5C Currency Pass-Through 524

CASE STUDY16-7 Exchange Rate Pass-Through to Import Prices in Industrial Countries 525

16.6 Adjustment under the Gold Standard 526

16.6A The Gold Standard 526

16.6B The Price-Specie-Flow Mechanism 527

Summary 529

A Look Ahead 529

Key Terms 530

Questions for Review 530

Problems 530

A16.1 The Effect of Exchange Rate Changes on Domestic Prices 531

A16.2 Derivation of the Marshall–Lerner Condition 534

A16.3 Derivation of the Gold Points and Gold Flows under the Gold Standard 536

Selected Bibliography 537

INTERNet 539

17 The Income Adjustment Mechanism and Synthesis of Automatic Adjustments 541

17.1 Introduction 541

17.2 Income Determination in a Closed Economy 542

17.2A Determination of the Equilibrium National Income in a Closed Economy 542

17.2B Multiplier in a Closed Economy 545

17.3 Income Determination in a Small Open Economy 546

17.3A Import Function 546

CASE STUDY17-1 Income Elasticity of Imports 547

17.3B Determination of the Equilibrium National Income in a Small Open Economy 548

CASE STUDY17-2 Private Sector and Current Account Balances 549

17.3C Graphical Determination of the Equilibrium National Income 549

17.3D Foreign Trade Multiplier 551

CASE STUDY17-3 Growth in the United States and the World and U.S. Current Account Deficits 553

CASE STUDY17-4 Growth and Current Account Balance in Developing Economies 554

17.4 Foreign Repercussions 555

CASE STUDY17-5 Effect of the Asian Financial Crisis of the Late 1990s on OECD Countries 557

17.5 Absorption Approach 558

17.6 Monetary Adjustments and Synthesis of the Automatic Adjustments 559

17.6A Monetary Adjustments 559

17.6B Synthesis of Automatic Adjustments 560

[1] CASE STUDY17-6 Interdependence in the World Economy 561

17.6C Disadvantages of Automatic Adjustments 562

Summary 563

A Look Ahead 564

Key Terms 564

Questions for Review 565

Problems 565

A17.1 Derivation of Foreign Trade Multipliers with Foreign Repercussions 566

A17.2 The Transfer Problem Once Again 568

Selected Bibliography 570

INTERNet 572

18 Open-Economy Macroeconomics: Adjustment Policies 573

18.1 Introduction 573

CASE STUDY18-1 Government, Private-Sector, and Current Account Balances in the G-7 Countries 574

18.2 Internal and External Balance with Expenditure-Changing and Expenditure-Switching Policies 576

18.3 Equilibrium in the Goods Market, in the Money Market, and in the Balance of Payments 578

18.4 Fiscal and Monetary Policies for Internal and External Balance with Fixed Exchange Rates 581

18.4A Fiscal and Monetary Policies from External Balance and Unemployment 581

18.4B Fiscal and Monetary Policies from External Deficit and Unemployment 583

18.4C Fiscal and Monetary Policies with Elastic Capital Flows 584

CASE STUDY18-2 Relationship between U.S. Current Account and Budget Deficits 585

18.4D Fiscal and Monetary Policies with Perfect Capital Mobility 586

CASE STUDY18-3 Effect of U.S. Fiscal Policy in the United States and Abroad 588

18.5 The IS–LM–BP Model with Flexible Exchange Rates 589

18.5A The IS–LM–BP Model with Flexible Exchange Rates and Imperfect Capital Mobility 589

18.5B The IS–LM–BP Model with Flexible Exchange Rates and Perfect Capital Mobility 591

CASE STUDY18-4 Effect of Monetary Policy in the United States and Other OECD Countries 592

18.6 Policy Mix and Price Changes 594

18.6A Policy Mix and Internal and External Balance 594

18.6B Evaluation of the Policy Mix with Price Changes 596

18.6C Policy Mix in the Real World 597

CASE STUDY18-5 U.S. Monetary and Fiscal Policies during the Past Decade 599

CASE STUDY18-6 Deeper U.S. Recession without Strong Fiscal and Monetary Measures 600

18.7 Direct Controls 600

18.7A Trade Controls 601

18.7B Exchange Controls 601

18.7C Other Direct Controls and International Cooperation 602

CASE STUDY18-7 Direct Controls on International Transactions Around the World 603

Summary 604

A Look Ahead 605

Key Terms 605

Questions for Review 605

Problems 606

A18.1 Derivation of the IS Curve 608

A18.2 Derivation of the LM Curve 609

A18.3 Derivation of the BP Curve 611

A18.4 Mathematical Summary 611

Selected Bibliography 613

INTERNet 615

19 Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply 617

19.1 Introduction 617

19.2 Aggregate Demand, Aggregate Supply, and Equilibrium in a Closed Economy 618

19.2A Aggregate Demand in a Closed Economy 618

19.2B Aggregate Supply in the Long Run and in the Short Run 619

19.2C Short-Run and Long-Run Equilibrium in a Closed Economy 621

CASE STUDY19-1 Deviations of Short-Run Outputs from the Natural Level in the United States 623

19.3 Aggregate Demand in an Open Economy under Fixed and Flexible Exchange Rates 623

19.3A Aggregate Demand in an Open Economy under Fixed Exchange Rates 624

19.3B Aggregate Demand in an Open Economy under Flexible Exchange Rates 625

19.4 Effect of Economic Shocks and Macroeconomic Policies on Aggregate Demand in Open Economies with Flexible Prices 626

19.4A Real-Sector Shocks and Aggregate Demand 627

19.4B Monetary Shocks and Aggregate Demand 628

19.4C Fiscal and Monetary Policies and Aggregate Demand in Open Economies 629

19.5 Effect of Fiscal and Monetary Policies in Open Economies with Flexible Prices 630

CASE STUDY19-2 Central Bank Independence and Inflation in Industrial Countries 632

CASE STUDY19-3 Inflation Targeting—A New Approach to Monetary Policy 633

19.6 Macroeconomic Policies to Stimulate Growth and Adjust to Supply Shocks 634

19.6A Macroeconomic Policies for Growth 634

19.6B Macroeconomic Policies to Adjust to Supply Shocks 635

CASE STUDY19-4 Petroleum Shocks and Stagflation in the United States 637

CASE STUDY19-5 Impact of an Increase in the Price of Petroleum 638

CASE STUDY19-6 Actual and Natural Unemployment Rates and Inflation in the United States 639

Summary 640

A Look Ahead 641

Key Terms 641

Questions for Review 641

Problems 642

Selected Bibliography 642

INTERNet 644

20 Flexible versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination 645

20.1 Introduction 645

20.2 The Case for Flexible Exchange Rates 646

20.2A Market Efficiency 647

20.2B Policy Advantages 647

20.3 The Case for Fixed Exchange Rates 649

20.3A Less Uncertainty 649

20.3B Stabilizing Speculation 650

20.3C Price Discipline 652

CASE STUDY20-1 Macroeconomic Performance under Fixed and Flexible Exchange Rate Regimes 653

20.3D The Open-Economy Trilemma 654

20.4 Optimum Currency Areas, the European Monetary System, and the European Monetary Union 655

20.4A Optimum Currency Areas 656

20.4B European Monetary System (1979–1998) 657

CASE STUDY20-2 The 1992–1993 Currency Crisis in the European Monetary System 658

20.4C Transition to Monetary Union 658

20.4D Creation of the Euro 660

CASE STUDY20-3 Maastricht Convergence Indicators 660

CASE STUDY20-4 Benefits and Costs of the Euro 663

20.4E The European Central Bank and the Common Monetary Policy 663

CASE STUDY20-5 The Eurozone Crisis 664

20.5 Currency Boards Arrangements and Dollarization 665

20.5A Currency Board Arrangements 665

20.5B Dollarization 666

CASE STUDY20-6 Argentina’s Currency Board Arrangements and Crisis 666

20.6 Exchange Rate Bands, Adjustable Pegs, Crawling Pegs, and Managed Floating 667

20.6A Exchange Rate Bands 667

20.6B Adjustable Peg Systems 668

20.6C Crawling Pegs 670

20.6D Managed Floating 670

CASE STUDY20-7 Exchange Rate Arrangements of IMF Members 672

20.7 International Macroeconomic Policy Coordination 673

Summary 675

A Look Ahead 676

Key Terms 676

Questions for Review 676

Problems 677

A20.1 Exchange Rate Arrangements 678

Selected Bibliography 683

INTERNet 686

21 The International Monetary System: Past, Present, and Future 687

21.1 Introduction 687

21.2 The Gold Standard and the Interwar Experience 688

21.2A The Gold Standard Period (1880–1914) 689

21.2B The Interwar Experience 690

21.3 The Bretton Woods System 691

21.3A The Gold-Exchange Standard (1947–1971) 692

21.3B Borrowing from the International Monetary Fund 693

21.4 Operation and Evolution of the Bretton Woods System 694

21.4A Operation of the Bretton Woods System 694

21.4B Evolution of the Bretton Woods System 695

CASE STUDY21-1 Macroeconomic Performance under Different Exchange Rate Regimes 697

21.5 U.S. Balance-of-Payments Deficits and Collapse of the Bretton Woods System 698

21.5A U.S. Balance-of-Payments Deficits 698

21.5B Collapse of the Bretton Woods System 700

21.6 The International Monetary System: Present and Future 702

21.6A Operation of the Present System 702

21.6B Current IMF Operation 703

21.6C Problems with Present Exchange Rate Arrangements 706

21.6D Proposals for Reforming Present Exchange Rate Arrangements 707

21.6E Financial Crises in Emerging Market Economies 709

CASE STUDY21-2 The Anatomy of a Currency Crisis: The Collapse of the Mexican Peso 709

CASE STUDY21-3 Chronology of Economic Crises in Emerging Markets: From Asia to Argentina 710

CASE STUDY21-4 The Financial Crisis in the United States and Other Advanced Economies 713

21.6F Other Current International Economic Problems 714

CASE STUDY21-5 Trade Imbalances of the Leading Industrial Nations 716

Summary 718

Key Terms 720

Questions for Review 720

Problems 721

A21.1 International Reserves: 1950–2011 722

Selected Bibliography 724

INTERNet 728

Glossary of Key Terms 729

Name Index 743

Subject Index 751

 

Produkt-Details

• Erscheint lt. Verlag: 4.1.2013
• Verlagsort: New York
• Sprache: englisch
• Maße: 198 x 234 mm
• Gewicht: 1338 g
• Themenwelt: Wirtschaft ► Volkswirtschaftslehre ► Makroökonomie
• ISBN-10: 1-118-17793-2 / 1118177932
• ISBN-13: 978-1-118-17793-8 / 9781118177938
• Zustand: Neuware