Econ 333 Sept 23

Econ 333 Sept 23 - Econ 333 Intra-industry Trade (IIT)...

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Econ 333 Intra-industry Trade (IIT)
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Interindustry trade and IIT are not incompatible. They are just two parts of the whole (international trade). We’ve explained what causes the former and now we’re moving to an explanation of the latter. IIT messy compared logic of H-O (factor- proportions)
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Inter versus Intra Industry Trade IIT index: continuum from 0 to 1. Zero is pure factor-proportions trade. The closer you get to 1 the more things look like IIT. X - M Intraindustry Trade Index 1 - X M = +
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How Many Times Do YOU Face consumption choice between only domestic (U.S.-produced) goods goods or services? Face consumption choice between only imported (foreign-produced) goods or services? Face consumption choice between both domestic and imported goods or services
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IIT in Homogeneous Products Homogeneous doesn’t matter who produces border trade (high shipping costs might mean products across a border are closer (lower-cost) than from another region of your country),
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This note was uploaded on 09/23/2009 for the course ECON 333 taught by Professor Roberts during the Spring '09 term at Ill. Chicago.

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Econ 333 Sept 23 - Econ 333 Intra-industry Trade (IIT)...

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