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Economic Category:
International Economics
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2.
Balance of Payments
The balance of payments accounts of a country record the payments and receipts of the residents of the country in their transactions with residents of other countries. This article examines this and debunks the general misconception that the existence of a current account deficit is a sign of bad economic conditions. [Details...]
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3.
Capital Flight
This article explains what capital flight is and the types of it there are and who it effects. Different options are suggested to reduce capital flight or for governments to limit capital flight. [Details...]
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4.
Competitiveness
Using living standards, this article examines how well the United States performs compared to other economies, how America performs in international trade, and whether America is doing the best that it can. [Details...]
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5.
David Ricardo
David Ricardo (1772-1823) was one of the greatest theoretical economists of all time. This article describes Ricardo's life and his contributions to the economic community, including the theory of rent and the concept of comparative advantage. [Details...]
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7.
Exchange Rates
This article describes the instability of exchange rates since the collapse of the Bretton Woods System and how, under the "floating" exchange rates we have had since 1973, exchange rates are determined by people buying and selling currencies in the foreign-exchange markets. [Details...]
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8.
Foreign Investment in the United States
This article tells how much foreign investment there is and of what and by whom. It explains why foreigners invest in the United States, whether it is good or bad, and the long term consequences of foreign investments. [Details...]
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9.
Free Trade
For more than two centuries, economists have steadfastly promoted free trade among nations as the best trade policy. Despite this intellectual barrage, many practical men and women of affairs continue to view the case for free trade skeptically, as an abstract argument made by ivory-tower economists with, at most, one foot on terra firma. Such people "know" that our vital industries must be protected from foreign competition.
[Details...]
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10.
Free Trade Agreements and Customs Unions
This article describes free trade and how it provides benefits but still hurts some people. While virtually all economists think free trade is desirable, they differ on how best to make the transition from tariffs, and quotas to free trade. [Details...]
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12.
Mercantilism
Mercantilism is economic nationalism for the purpose of building a wealthy and powerful state. This article describes the Mercantilist Period in the sixteenth century. [Details...]
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13.
Monetary Unions
This article defines monetary unions, discusses its advantages and disadvantages, explains its history in the nineteenth century, and gives examples of success stories. [Details...]
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15.
Protectionism
This article explains cases in which protection could improve a nation's economic wellbeing, U.S. trade, voluntary export restrictions, and discusses fair trade and unfair trade. [Details...]
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16.
Sanctions
This article discusses purposes of economic sanctions, types of sanctions, effectiveness of sanctions, and the future of sanctions. [Details...]
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17.
Smoot-Hawley Tariff
The Smoot-Hawley Tariff of 1930 was the subject of enormous controversy at the time of its passage and remains one of the most notorious pieces of legislation in the history of the United States. This article explains why it caused controversy and is still referred to today. [Details...]
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19.
The Depression of 1893
This article describes economic developments in the decades leading up to the depression; the performance of the economy during the 1890's; domestic and international causes of depression; and political and social responses to the depression. [Details...]
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20.
The Fordney-McCumber Tariff of 1922
This article begins with reference to the Emergency Tariff Act of 1921, then goes on to discusse the Fordney-McCumber Tariff. The article then compares Fordney-McCumber, Payne-Aldrich, and Underwood-Simmons, and discusses the Fordney-McCumber Tariff with respect to American agriculture and International retaliation. [Details...]
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22.
Third World Debt
This article describes the history of third world debt and how it grew in the seventies and discusses to whom the debt is owed. [Details...]
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23.
Arbitrage Model
The direction of trade is crucial in currency arbitrage. Use this page to enter some exchange rates below and see a graph of the TPF for the dollar and the pound with arbitrage profit as demonstrated from the slopes of the TPF.
[Details...]
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24.
Comparative Advantage
The linear production possibilities frontier is shown to be a restraint/constraint and, it explains scarcity and quantitatively defines opportunity cost. The model assumes there are two goods, a fixed resource endowment and a known level of technological expertise in production. [Details...]
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26.
Exchange Rate Model
The Exchange Rate Model is a descriptive graphical model of international exchange markets. The objective is to explain the slope of the supply function of foreign exchange. One expects supply functions to be upward sloping and this demonstration explains how events in the product market lead to this result.
[Details...]
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27.
Trade Equilibrium
The one-country international trade equilibrium model includes community indifference curves (denoted CIC, suggested to show demand) to reveal preferences in consumption and production possibilities frontiers (PPF) with increasing opportunity costs in production.
[Details...]
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29.
Unemployment in Eastern and Central Europe
Unemployment, once unknown and illegal in the formerly communist regimes in eastern and central Europe, has become a significant social and economic phenomenon. The rise in unemployment rates has been large but varied across countries. The transition from centrally planned economies to market-oriented economies has produced significant reductions in employment in the state sector as consumer-driven incentives begin to influence industrial structure. Reductions in employment in the state sector were partially offset by reductions in labor force particpation. Differences in the decline in labor force participation among countries led to significant differences in the relationship between unemployment growth and contraction in employment. However, the decline in labor force participation seems to be concentrated in the early stages of the transition, and in the future declining labor force participation is not likely to play as significant a role in dampening the growth of unemployment. [Details...]
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30.
International Economics
This book brings together, and to a certain extent integrates, my theoretical writings on international economics over the past decade. All the major topics are touched on, and I have organized them into a pattern that seemed to me to make them most useful to the student. Part I analyzes the classical theory and covers such topics as the terms of trade, income transfers, productivity changes, tariffs, consumption taxes, production taxes, transport costs, tariff preferences, factor mobility, and policy analysis in the context of general equilibrium systems. Part II introduces monetary-dynamic elements into the theory of exchange and develops the theory of adjustment, the balance of payments, growth, the distribution of the burden of adjustment, optimum currency areas, monetary standards, and fixed and flexible exchange rate systems. Part III treats international macroeconomic theory from the standpoint of the theory of policy and develops the principle of effective market classification, the appropriate mix of monetary and fiscal policy under fixed and flexible exchange systems, capital mobility, the international transmission of cycles, commercial policy, the welfare cost of exchange crises, the crisis problem, and multiple-currency systems. [Details...]
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31.
A Simple Experiment of Comparative Advantage
Paul Samuelson once said that David Ricardo's demonstration of Comparative Advantage is one piece of Economics which is perfectly simple without being perfectly obvious. This is shown, he claims, by the many business and political leaders of obvious intelligence who have utterly failed to understand it.
Unfortunately, this can also be said of the many intelligent Economics students, who, having learned to parrot the theory, still do not believe it. Am I the only instructor who, having put his Ricardian triangles through their paces, has turned from the blackboard to notice expressions that are somewhat more than skeptical? As an MBA student said to me good-naturedly after class, "Well, it's all theory, isn't it?"
The best diet for such healthy skepticism is for students to take a ride atop those trade triangles themselves--before hearing what theory says should happen. By taking this ride, the teacher himself was led to discover a simple misinterpretation reproduced in many textbooks. The pedagogical experiment is as follows. [Details...]
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32.
International Trade and Money: A Simple Classroom Demonstration
The activity presented in this paper is designed to demonstrate both gains from trade and the importance of fiat money as a medium of exchange. While this is certainly not the first activity to demonstrate either concept, it does offer the instructor the opportunity to prepare one demonstration for the presentation of multiple topics. This demonstration can be used in both a principles of macroeconomics or microeconomics classroom. It also can be tailored in several ways to reduce the amount of time required or to emphasize a particular topic. Student learning is enhanced as students typically find this activity humorous, adding to their excitement and interest in the topic. [Details...]
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