Non Tariff Barriers
FIGURE 7.1 Welfare effects of a quota.
FIGURE 7.2 Welfare effects of a domestic
FIGURE 7.3 Price supports and tariffs.
FIGURE 7.4 Trade policy and foreign monopoly.
Chapter 4 The Heckscher-Ohlin Model
The classical model has several shortcomings:
1. Makes unrealistic predictions like complete specialization that are not consistent with the
real-world. Complete specialization results from constant opportunity cost ass
Chapter 13 The Foreign-Exchange Market
The market for foreign exchange arises for tourism, exports/import, and international
investment. Usually only tourism requires actual currency, the majority of the market for
foreign exchange involves the transfer o
Chapter 16 FX Risk, Forecasting and International Investment
Currency risk and currency risk management for MNCs and international investors depend on
expectations of ex-rate changes, which involve ex-rate forecasting. For example, if the
Chapter 3 Classical Model of International Trade
We now have a model to answer question: How and why national engage in trade?
CH 3 presents the classical theory of international trade going back to Adam Smith
(1776) and David Ricardo (1819).
Chapter 14 Prices and Exchange Rates: Purchasing Power Parity (PPP)
We start with the Law of One Price (LOP): PD = E PF , where PD is the domestic price in $;
PF is the foreign price, e.g., in ; and E is the $/ ex-rate. LOP says that a tradable commodity
Chapter 11 An Introduction to International Finance
Chapters 1-10 deal with international trade in goods and services. Chapters 11-21 deal with
trade in financial assets international stocks and bonds, multinational corporations (MNCs)
Chapter 2 Tools of Analysis for International Trade Models
See p. 28 in textbook. We construct an economic model of intl trade to answer
the questions like:
Which countries trade what to whom?
Why does int'l. trade occur?
What goods will a country impo
Chapter 6 Tariffs
Intl trade: In the process of raising a countrys overall consumption, production, prosperity,
wealth, and standard of living, there is (are): a) redistribution of production and b) changes in
factor prices (wages, rents). Therefore, ther
Chapter 15 Exchange Rates, Interest Rates, and Interest Parity (IP)
International Trade: Goods/services AND financial assets (stocks, bonds, CDs, FDI), and exrates change in response to both types of trade. PPP and LOP apply to goods, and we learned in
Chapter 7 NonTariff Barriers (NTBs) and Arguments for Protection
1. NTBs include quotas, subsidies, health & safety standards, government procurement
2. Arguments for protection protection of jobs, industry restructuring, national
Chapter 1 An Introduction to International Trade
See opening questions on p. 2 in text.
Almost 200 countries in the world goods are produced, exchanged and consumed
in each country Global Economy.
Review of GNP vs. GDP.
GNP: Production/output/income measu
Chapter 12 The Balance of Payments
Balance of Payments (BP) is an accounting record (using double entry bookkeeping)
of a countrys trade in goods, services and financial assets with the rest of the world
(ROW), over some time period - monthly, quarterly,