1、To Accompany,Sixth Editionby Paul R.Krugman and Maurice ObstfeldCopyright 2003 Pearson Education,Inc.Slide 5-2Chapter OrganizationIntroductionA Standard Model of a Trading EconomyInternational Transfers of Income:Shifting the RD CurveTariffs and Export Subsidies:Simultaneous Shifts in RS and RDSumma
2、ryAppendix:Representing International Equilibrium with Offer CurvesCopyright 2003 Pearson Education,Inc.Slide 5-3IntroductionPrevious trade theories have emphasized specific sources of comparative advantage which give rise to international trade:Differences in labor productivity(Ricardian model)Diff
3、erences in resources(specific factors model and Heckscher-Ohlin model)The standard trade model is a general model of trade that admits these models as special cases.Copyright 2003 Pearson Education,Inc.Slide 5-4A Standard Model of a Trading EconomyThe standard trade model is built on four key relati
4、onships:Production possibility frontier and the relative supply curveRelative prices and relative demandWorld relative supply and world relative demandTerms of trade and national welfareCopyright 2003 Pearson Education,Inc.Slide 5-5A Standard Model of a Trading EconomyProduction Possibilities and Re
5、lative SupplyAssumptions of the model:Each country produces two goods,food(F)and cloth(C)Each countrys production possibility frontier is a smooth curve(TT)The point on its production possibility frontier at which an economy actually produces depends on the price of cloth relative to food,PC/PF.Iso-
6、value lines Lines along which the market value of output is constantCopyright 2003 Pearson Education,Inc.Slide 5-6Figure 5-1:Relative Prices Determine the Economys OutputQIsovalue linesTTA Standard Model of a Trading Economy Cloth production,QCFood production,QFCopyright 2003 Pearson Education,Inc.S
7、lide 5-7Figure 5-2:How an Increase in the Relative Price of Cloth Affects Relative SupplyQ1VV1(PC/PF)1Q2VV2(PC/PF)2A Standard Model of a Trading EconomyTT Cloth production,QCFood production,QFCopyright 2003 Pearson Education,Inc.Slide 5-8Relative Prices and DemandThe value of an economys consumption
8、 equals the value of its production:PCQC+PFQF=PCDC+PFDF=VThe economys choice of a point on the isovalue line depends on the tastes of its consumers,which can be represented graphically by a series of indifference curves.A Standard Model of a Trading EconomyCopyright 2003 Pearson Education,Inc.Slide
9、5-9Indifference curves Each traces a set of combinations of cloth(C)and food(F)consumption that leave the individual equally well off They have three properties:Downward sloping The farther up and to the right each lies,the higher the level of welfare to which it corresponds Each gets flatter as we
10、move to the rightA Standard Model of a Trading EconomyCopyright 2003 Pearson Education,Inc.Slide 5-10TTFigure 5-3:Production,Consumption,and Trade in the Standard Model Cloth production,QCFood production,QFQDIndifference curvesFood importsCloth exportsA Standard Model of a Trading EconomyCopyright 2
11、003 Pearson Education,Inc.Slide 5-11If the relative price of cloth,PC/PF,increases,the economys consumption choice shifts from D1 to D2.The move from D1 to D2 reflects two effects:Income effect Substitution effect It is possible that the income effect will be so strong that when PC/PF rises,consumpt
12、ion of both goods actually rises,while the ratio of cloth consumption to food consumption falls.A Standard Model of a Trading EconomyCopyright 2003 Pearson Education,Inc.Slide 5-12TTFigure 5-4:Effects of a Rise in the Relative Price of ClothQ1VV1(PC/PF)1Q2VV2(PC/PF)2D2D1A Standard Model of a Trading
13、 Economy Cloth production,QCFood production,QFCopyright 2003 Pearson Education,Inc.Slide 5-13The Welfare Effect of Changes in the Terms of TradeTerms of trade The price of the good a country initially exports divided by the price of the good it initially imports.A rise in the terms of trade increase
14、s a countrys welfare,while a decline in the terms of trade reduces its welfare.A Standard Model of a Trading EconomyCopyright 2003 Pearson Education,Inc.Slide 5-14Determining Relative PricesSuppose that the world economy consists of two countries:Home(which exports cloth)Its terms of trade are measu
15、red by PC/PF Its quantities of cloth and food produced are QC and QF Foreign(which exports food)Its terms of trade are measured by PF/PC Its quantities of cloth and food produced are Q*C and Q*FA Standard Model of a Trading EconomyCopyright 2003 Pearson Education,Inc.Slide 5-15To determine PC/PF,one
16、 must find the intersection of world relative supply of cloth and world relative demand.The world relative supply curve(RS)is upward sloping because an increase in PC/PF leads both countries to produce more cloth and less food.The world relative demand curve(RD)is downward sloping because an increas
17、e in PC/PF leads both countries to shift their consumption mix away from cloth toward food.A Standard Model of a Trading EconomyCopyright 2003 Pearson Education,Inc.Slide 5-16Figure 5-5:World Relative Supply and DemandRSRDRelative priceof cloth,PC/PFRelative quantityof cloth,QC+Q*C QF+Q*FA Standard
18、Model of a Trading Economy(PC/PF)11Copyright 2003 Pearson Education,Inc.Slide 5-17Economic Growth:A Shift of the RS CurveIs economic growth in other countries good or bad for our nation?It may be good for our nation because it means larger markets for our exports.It may mean increased competition fo
19、r our exporters.Is growth in a country more or less valuable when that nation is part of a closely integrated world economy?It should be more valuable when a country can sell some of its increased production to the world market.It is less valuable when the benefits of growth are passed on to foreign
20、ers rather than retained at home.A Standard Model of a Trading EconomyCopyright 2003 Pearson Education,Inc.Slide 5-18Growth and the Production Possibility FrontierEconomic growth implies an outward shift of a countrys production possibility frontier(TT).Biased growth Takes place when TT shifts out m
21、ore in one direction than in the other Can occur for two reasons:Technological progress in one sector of the economy Increase in a countrys supply of a factor of productionA Standard Model of a Trading EconomyCopyright 2003 Pearson Education,Inc.Slide 5-19Figure 5-6:Biased GrowthTT1TT1TT2TT2A Standa
22、rd Model of a Trading EconomyCloth production,QCFood production,QF(a)Growth biased toward clothCloth production,QCFood production,QF(b)Growth biased toward foodCopyright 2003 Pearson Education,Inc.Slide 5-20Relative Supply and the Terms of TradeExport-biased growth Disproportionately expands a count
23、rys production possibilities in the direction of the good it exports Worsens a growing countrys terms of trade,to the benefit of the rest of the worldImport-biased growth Disproportionately expands a countrys production possibilities in the direction of the good it imports Improves a growing country
24、s terms of trade at the rest of the words expenseA Standard Model of a Trading EconomyCopyright 2003 Pearson Education,Inc.Slide 5-21Figure 5-7:Growth and Relative SupplyRelative priceof cloth,PC/PFRelative quantityof cloth,QC+Q*C QF+Q*FRS1RD1(PC/PF)1RS2(PC/PF)22Relative priceof cloth,PC/PFRelative
25、quantityof cloth,QC+Q*C QF+Q*FRS2RD2(PC/PF)2RS1(PC/PF)11(a)Cloth-biased growth(b)Food-biased growthA Standard Model of a Trading EconomyCopyright 2003 Pearson Education,Inc.Slide 5-22International Effects of GrowthExport-biased growth in the rest of the world improves our terms of trade,while import
26、-biased growth abroad worsens our terms of trade.Export-biased growth in our country worsens our terms of trade,reducing the direct benefits of growth,while import-biased growth leads to an improvement of our terms of trade.A Standard Model of a Trading EconomyCopyright 2003 Pearson Education,Inc.Sl
27、ide 5-23Immiserizing growth A situation where export-biased growth by poor nations can worsen their terms of trade so much that they would be worse off than if they had not grown at all It can occur under extreme conditions:Strongly export-biased growth must be combined with very steep RS and RD cur
28、ves.(RS上升时，由于RD较陡，故价格下降很多；RD增加时，由于RS较陡，故需求量增加很少）It is regarded by most economists as more a theoretical point than a real-world issue.A Standard Model of a Trading EconomyCopyright 2003 Pearson Education,Inc.Slide 5-24International Transfers of Income:Shifting the RD CurveInternational transfers of
29、income,such as war reparations and foreign aid,may affect a countrys terms of trade by shifting the world relative demand curve.Relative world demand for goods may shift because of:Changes in tastesChanges in technologyInternational transfers of incomeThe Transfer ProblemHow international transfers
30、affect the terms of tradeCopyright 2003 Pearson Education,Inc.Slide 5-25Effects of a Transfer on the Terms of TradeWhen both countries allocate their change in spending in the same proportions(Ohlins point):The RD curve will not shift,and there will be no terms of trade effect.When the two countries
31、 do not allocate their change in spending in the same proportions(Keyness point):The RD curve will shift and there will be a terms of trade effect.The direction of the effect on terms of trade will depend on the difference in Home and Foreign spending patterns.International Transfers of Income:Shift
32、ing the RD CurveCopyright 2003 Pearson Education,Inc.Slide 5-26Figure 5-8:Effects of a Transfer on the Terms of TradeRelative priceof cloth,PC/PFRelative quantityof cloth,QC+Q*C QF+Q*FRSRD2RD1(PC/PF)221(PC/PF)1International Transfers of Income:Shifting the RD CurveCopyright 2003 Pearson Education,In
33、c.Slide 5-27Presumptions about the Terms of Trade Effects of TransfersA transfer will worsen the donors terms of trade if the donor has a higher marginal propensity to spend on its export good than the recipient.In practice,most countries spend a much higher share of their income on domestically pro
34、duced goods than foreigners do.This is not necessarily due to differences in taste but rather to barriers to trade,natural and artificial.International Transfers of Income:Shifting the RD CurveCopyright 2003 Pearson Education,Inc.Slide 5-28SummaryThe standard trade model provides a framework that ca
35、n be used to address a wide range of international issues and admits previous trade models as special cases.A countrys terms of trade are determined by the intersection of the world relative supply and demand curves.Economic growth is usually biased.Growth that is export-biased(import-biased)worsens
36、(improves)the terms of trade.Copyright 2003 Pearson Education,Inc.Slide 5-29International transfers of income may affect a countrys terms of trade,depending if they shift the world relative demand curve.Import tariffs and export subsidies affect both relative supply and demand.The terms of trade eff
37、ects of an export subsidy hurt the exporting country and benefit the rest of the world,while those of a tariff do the reverse.Both trade instruments have strong income distribution effects within countries.SummaryCopyright 2003 Pearson Education,Inc.Slide 5-30Appendix 1:Gains from Trade交换收益：个人或国家之间拥
38、有不同的商品禀赋或偏好，通过商品交易均可改善各自的福利（U1到 U2）；专业化收益：个体或国家之间通过专门从事其效率相对最高的生产来获得额外的利益（U2到U3）。CFEQP*U1U2U3图1-15XOYpwCopyright 2003 Pearson Education,Inc.Slide 5-31Appendix 2:Effects of Economic Growth on Trade偏向出口的增长的福利效果 经济增长意味着国民收入水平的提高，国民福利改善；经济增长又可能恶化本国的贸易条件，对本国福利产生不利影响。Copyright 2003 Pearson Education,Inc.S
39、lide 5-32XOYQQ*QCC*C图311 （）从C到C：纯粹的增长利益；（）从C到C*：贸易条件恶化，抵消了部分经济 增长利益，以“转移支付”的形 式为他国所享有。Appendix 2:ContedCopyright 2003 Pearson Education,Inc.Slide 5-33悲惨增长”（immiserizing growth）转移至他国的利益部分超出了增长利益，总福利效果为负。QCQ*C*XOY图3-12Appendix 2:ContedCopyright 2003 Pearson Education,Inc.Slide 5-34n悲惨增长的前提条件：经济增长偏向增长国的出口部门；增长国在世界市场是一个大国，其出口供给的变动足以影响世界价格；增长国进口边际倾向较高，即增长国对进口的需求会因经济增长而显著增加；增长国出口产品在世界市场上需求价格弹性非常低。Appendix 2:Conted
