Global economic issues and policies

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Số hóa bởi Trung tâm Học liệu – ĐH TN http://www.lrc-tnu.edu.vn

Số hóa bởi Trung tâm Học liệu – ĐH TN http://www.lrc-tnu.edu.vn

Số hóa bởi Trung tâm Học liệu – ĐH TN http://www.lrc-tnu.edu.vn

Số hóa bởi Trung tâm Học liệu – ĐH TN http://www.lrc-tnu.edu.vn

Globa l Economi c

Issue s an d

Policie s

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THOIVISON

*

SOUTH-WESTERN

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Global Economic Issues and Policies

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Brie f Content s

Contents v

Preface xix

UNIT ONE Introduction to the Global Economy 1

CHAPTER ONE Understanding the Global Economy 2

CHAPTER TWO Comparative Advantage—How Nations Can Gain

from International Trade J4

UNITTWO International Trade—Enduring Issues 61

CHAPTER THREE Sources of Comparative Advantage 62

CHAPTER FOUR Regulating International Trade—Trade Policies and Their Effects 90

CHAPTER FIVE Regionalism and Multilateralism 124

UNITTHREE International Finance—Enduring Issues 159

CHAPTER SIX Balance of Payments and Foreign Exchange Markets 160

CHAPTER SEVEN Exchange-Rate Systems, Past to Present 202

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iv Brief Contents

CHAPTER EIGHT The Power of Arbitrage—Purchasing Power and Interest

Rate Parities 230

CHAPTER NINE Global Money and Banking—Where Central Banks Fit

into the World Economy 260

UNIT FOUR Contemporary Global Economic Issues and Policies 295

CHAPTER TEN Can Globalization Lift All Boats? 296

CHAPTER ELEVEN Industrial Structure and Trade in the Global Economy￾Businesses without Borders 340

CHAPTER TWELVE The Public Sector in the Global Economy 372

CHAPTER THIRTEEN Rules versus Discretion—Can Policymakers Stick to Their

Promises? 408

CHAPTER FOURTEEN Dealing with Financial Crises—Does the World Need a New

International Financial Architecture? 442

Glossary 477

Index 489

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Content s

UNIT ONE Introduction to the Global Economy 1

CHAPTER ONE Understanding the Global Economy 2

Fundamental Issues 2

Global Economic Policy and Issues 3

The Most Globalized Nations 3

Policy Notebook: Should the United States Expand Trade

with Africa? 5

Important Issues Advanced in This Text 6

The Global Market for Goods and Services 6

Online Globalization: Smokestack Industries Turn to the Web

to Promote Global Business 7

The Importance of Global Trade 8

Management Notebook: Anoplophora Glabripennis—

Unwanted Imports 10

The International Monetary and Financial Markets 10

The Foreign Exchange Markets 10

Foreign Direct Investment 11

Capital Flows to Emerging Economies 12

Understanding Global Markets: Supply and Demand 13

Demand and Supply 13

Changes in Demand and Supply 15

Visualizing Global Economic Issues: The Demand

and Supply Curves j 6

Market Demand and Supply 19

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vi Contents

Consumer and Producer Surplus 20

Consumer Surplus 20

Producer Surplus 21

How Market Prices Are Determined 21

Visualizing Global Economic Issues: Measuring Consumer

and Producer Surplus 22

Excess Quantity Supplied and Excess Quantity Demanded 22

Visualizing Global Economic Issues: The Equilibrium

Market Price 24

The Equilibrium Price 24

The Global Market 25

Consumer and Producer Surplus and the Global Market 27

Visualizing Global Economic Issues: A Global Coffee Market 28

Chapter Summary 30

Questions and Problems 31

Online Application 32

References and Recommended Readings 32

CHAPTER TWO Comparative Advantage—How Nations Can Gain

from International Trade 34

Fundamental Issues 34

The Economics of "Going It Alone" 35

Production Possibilities 35

Visualizing Global Economic Issues: The Production

Possibilities Frontier 38

Consumption Possibilities and Choices 39

Absolute Advantage—Do Big Countries Have an Upper Hand? 40

Absolute Advantage as a Rationale for Trade 40

What Absolute Advantage Implies—and What It Doesn't 43

Comparative Advantage—Why Trade Benefits Nearly Everyone 45

Comparative Advantage 45

Online Globalization: Will Other Languages Stand a Chance

Against English? 46

Gains from Trade 49

Visualizing Global Economic Issues: Production Possibilities

Frontiers and Comparative Advantage 50

Online Globalization: Is the U.S. "First-Mover Advantage"

in E-Commerce Unassailable? 52

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Contents vii

Why Trade Is Not a Clear-Cut Issue 52

Gains from Trade Can Be Fleeting 53

The Redistributive Effects of Trade 53

Chapter Summary 54

Questions and Problems 55

Online Application 58

References and Recommended Readings 59

UNITTWO International Trade: Enduring Issues 61

CHAPTER THREE Sources of Comparative Advantage 62

Fundamental Issues 62

The Factor Proportions Explanation of International Trade 63

The Factor Proportions Approach 63

The Heckscher-Ohlin Theorem and International Trade 65

Visualizing Global Economic Issues: Factor Endowments

and the Production Possibilities Frontier 66

Visualizing Global Economic Issues:

The Heckscher-Ohlin Theorem 68

How Well Does the Factor Proportions Approach Explain Trade? 70

The Leontief Paradox 70

Online Globalization: India's Online Business Services Industry 72

More Recent Tests of the Factor Proportions Approach 73

Trade, Factor Prices, and Real Income 74

Factor Price Equalization 74

Visualizing Global Economic Issues: The Factor Price

Equalization Theorem 76

Trade and Real Income 78

International Production and Comparative Advantage 80

The Internationalization of Production 80

Management Notebook: Do Manufacturers Really Need a Factory? 81

Kaleidoscopic Comparative Advantage 82

Economic Growth and International Trade 82

Economic Growth 83

The Rybczynski Theorem 84

Growth and Trade 84

Visualizing Global Economic Issues: The Rybczynski Theorem 85

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viii Contents

Chapter Summary 86

Questions and Problems 87

Online Application 88

References and Recommended Readings 89

CHAPTER FOUR Regulating International Trade—Trade Policies and Their Effects 90

Fundamental Issues 90

Taxes and Their Direct Effect on Price 91

Taxes as a Factor Influencing Supply 91

Who Really Pays a Tax? 93

Visualizing Global Economic Issues: The Effects of a Tax 94

The Economic Effects of a Tariff 95

Types of Tariffs 96

Effects of a Tariff in a Small-Country Setting 97

Effects of a Tariff in a Large-Country Setting 99

Visualizing Global Economic Issues: A Tariff

in a Small-Country Setting 100

Visualizing Global Economic Issues: The Effects of a Tariff

in a Large-Country Setting 102

Quotas: A Direct Approach to Restricting Trade 104

Economic Effects of a Quota 104

Online Globalization: Will the Internet Save the U.S. Textile

Industry from Falling Trade Barriers? 106

Quota Rent 107

Visualizing Global Economic Issues: The Effects

of an Import Quota 108

Effects of a Quota in a Large Country 109

Voluntary Export Restraints 1 io

The Appeal of VERs 110

U.S. Automobiles and Japanese VERs 111

Effects of VERs 11 j

Export Subsidies and Countervailing Duties 112

Effects of an Export Subsidy 112

Dumping U3

Trade Barriers and Their Costs 114

First- and Second-Best Policies 114

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Contents ix

Policy Notebook: Bananas and Carousels: Is This the Way

to Fair Trade? US

The Costs of Protection 116

Chapter Summary 117

Questions and Problems 119

Online Application 121

References and Recommended Readings 122

CHAPTER FIVE Regionalism and Multilateralism 124

Fundamental Issues 124

Regional Trade Blocs 125

Regional Trade Agreements 125

Measuring How Much Regionalism Matters for Trade 126

Preferential Trade Arrangements and Free Trade Areas 131

Preferential Trade Arrangements 131

Free Trade Areas 132

Customs Unions and Common Markets 137

Customs Unions: Treating Outsiders Equally 137

Common Markets: Freeing Up Resource Flows 138

Trade Creation, Diversion, or Deflection? 140

Trade Creation Versus Trade Diversion 140

Policy Notebook: Gravity, Trade, and the Euro 141

Trade Deflection 143

Visualizing Global Economic Issues: Trade Creation

versus Trade Diversion in a Three-Country World 144

Policy Notebook: The European Union—Fortress Europe? 146

Multilateral Approaches and Benefits 148

Most Favored Nation Status 148

Multilateral Trade Regulation 149

Online Globalization: The WTO—"Wired Trade Organization?" ISO

Will Regionalism Ultimately Evolve Into Multilateralism? 151

Policy Notebook: Section 201—Safeguard or Flashpoint? 152

Chapter Summary ; 53

Questions and Problems 155

Online Application 15s

References and Recommended Readings 157

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