lec_14_15_111B

lec_14_15_111B - ECN 111B: US Economic History since the...

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Lectures 14 & 15: International Trade and the Lectures 14 & 15: International Trade and the US Economy US Economy ECN 111B: US Economic History since the ECN 111B: US Economic History since the Civil War Civil War Winter 2010 Winter 2010
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Theory: The Case for (free) International Trade Comparative Advantage: What did the US trade internationally? Was the US open to trade? What impact did tariffs have on US Growth The “infant industry” argument for tariffs
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KEY Readings for Today’s KEY Readings for Today’s Lecture Lecture Essential Reading: Walton and Rockoff. 10th ed. pp. 403-408 Walton and Rockoff. 11th ed. pp. 368-374 Gavin Wright "The Origins of American Industrial Success, 1879-1940," American Economic Review , (Sept. 1990), pp. 651-658. (POSTED TO SMARTSITE) J. Bradford DeLong, "Trade Policy and America's Standard of Living: An Historical Perspective," in Susan Collins, ed., Trade and the American Worker (Washington, DC: Brookings Institution, 1998). (POSTED TO SMARTSITE)
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Key Points Key Points The US was a relatively closed economy The US was a not a free trade country US growth may have been retarded because of tariffs The US traded goods in which it had a comparative advantage
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Heckscher-Ohlin Trade Theory Heckscher-Ohlin Trade Theory 6 Assumptions Labor and other factors of production move freely European manufactures use labor intensively, US uses capital + natural resources Europe is “abundant” in labor USA is abundant in capital + natural resources There is free trade in international goods The technology for producing European and US goods is the same Tastes are the same across countries
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International Trade: Graphically International Trade: Graphically Fine textiles (Europe) Automobiles Slope = Autarky Price (autos) /Price (textiles) Q (textiles) Q (US) A* = No int. trade
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International Trade: Graphically International Trade: Graphically Fine textiles (Europe)
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This note was uploaded on 03/11/2010 for the course ECN ECN111b taught by Professor Meissner during the Winter '10 term at UC Davis.

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lec_14_15_111B - ECN 111B: US Economic History since the...

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