Chapter 1 Classical Theories of International Trade

1.1 Mercantilism

1.2 Trade Based on Absolute Advantage: Adam Smith

1.3 Trade Based on Comparative Advantage: David Ricardo

1.3.1 An Example of Comparative Advantage

1.3.2 Gains from Specialization and Trade with Comparative
Advantage

1.3.3 Comparative Advantage in Money Terms

1.4 Comparative Advantage and Opportunity Cost

1.4.1 Gains from Specialization and Trade with Opportunity
Costs

1.4.2 Production Possibilities Frontier and Constant Opportunity
Costs

1.4.3 Trade under Increasing Opportunity Costs

1.5 Comparative Advantage with More Than Two Commodities and
Countries

1.5.1 Comparative Advantage with More Than Two Commodities

1.5.2 Comparative Advantage with More Than Two Countries

1.6 Theory of Reciprocal Demand

1.7 Offer Curve and Terms of Trade

1.7.1 Offer Curve

1.7.2 Equilibrium Terms of Trade

1.7.3 Other Concepts of the Terms of Trade

Chapter 2 New Classical Theories of International Trade

2.1 Specific Factor Model

2.2 Factor Endowment Theory (H-O Model)

2.3 Other New Classical Theories

2.3.1 Rybczynski Theorem

2.3.2 Factor Price Equalization Theory

2.3.3 Stolper-Samuelson Theorem

2.3.4 Explaining Wage Inequality

2.4 Leontief Paradox

Chapter 3 Modern Trade Theories

3.1 Existence of Intraindustry Trade

3.2 Technological Gap, Product Life Cycle and International
Trade

3.2.1 Technological Gap Theory

3.2.2 Product Life Cycle Theory

3.3 Theory of Overlapping Demands

3.4 Economies of Scale, Imperfect Competition, and International
Trade

3.4.1 Economies of Scale and International Trade

3.4.2 Monopolistic Competition and Trade

3.5 Reciprocal Dumping Model

3.5.1 Economics of Dumping

3.5.2 Reciprocal Dumping

Chapter 4 Tariffs and Nontariff Barriers

4.1 Theories for Trade Protection

4.1.1 Infant Industry Argument

4.1.2 Terms of Trade Argument

4.1.3 Domestic Market Failure Argument

4.1.4 Strategic Trade Policy

4.2 Tariffs

4.2.1 Types of Tariffs

4.2.2 Effective Rate of Protection

4.2.3 Tariff Welfare Effects

4.3 Nontariff Trade Barriers

4.3.1 An Introduction to Nontariff Trade Barriers

4.3.2 Effects of Import Quota

4.3.3 Effects of Export Subsidy

Chapter 5 Regional Trading Arrangements

5.1 Types of Regional Trading Arrangements

5.2 Effects of Customs Union

5.2. l Static Effects

5.2.2 Dynamic Effects

5.3 Practice of Regional Integration

5.3.1 European Union

5.3.2 North American Free Trade Agreement

5.3.3 Association of Southeast Asian Nations

Chapter 6 Balance of Payments and Foreign Exchange

6.1 Balance of Payments

6.1.1 Current Account

6. l. 2 Capital and Financial Account

6.1.3 Automatic Adjustment of the Balance of Payments

6.2 Foreign Exchange Market and Exchange Rates

6.2.1 Foreign Exchange Market

6.2.2 Exchange Rate

6.2.3 Determinants of Exchange Rates

6.3 Exchange Rate System

Chapter 7 Theories of Exchange Rate Determination

7.1 Theory of Purchasing Power Parity

7.1.1 Alsolute Purchasing Power Parity

7.1.2 Relative Purchasing Power Parity

7.2 Theory of Interest Rate Parity

7.2.1 Covered Interest Rate Parity

7.2.2 Uncovered Interest Rate Parity

7.3 Balance of Payments Approach to Exchange Rates

7.4 Asset Market Approach to Exchange Rates

7.4.1 Flexible-Price Monetary Approach

7.4.2 Sticky-Price Monetary Approach

7.4. 3 Portfolio Approach to Exchange Rates

Chapter 8 Balance of Payments Adjustments

8.1 Elasticities Approach to the Balance of Payments

8.2 Multiplier Approach to the Balance of Payments

8.3 Absorption Approach to the Balance of Payments

8.4 Monetary Approach to the Balance of Payments

8.4.1 A Change in Domestic Credit under Fixed Exchange Rates

8.4.2 A Change in the Quantity of Money Demanded under Fixed
Exchange Rates

8.4.3 A Change in Domestic Credit under Floating Exchange
Rates

8.4.4 A Change in the Quantity of Money Demanded under Floating
Exchange Rates

Chapter 9 Macroeconomic Policie in Open Economy

9.1 Internal Balance and External Balance in Open Economy

9.1.1 Internal Balance and External Balance

9.1.2 Policy Instruments

9.1.3 Tinbergen Rule

9.1.4 Meade Conflict

9.2 Policy Mix to Achieve Both Internal Balance and External
Balance

9.2.1 Mundeli Assignment Rule

9.2.2 Swan Model

9.3 Effects of Macroeconomic Policies under Fixed Exchange
Rates

9.3.1 IS-LM-BP Model

9.3.2 Effects of Fiscal Policy under Fixed Exchange Rates

9.3.3 Effects of Monetary Policy under Fixed Exchange Rates

9.4 Effects of Macroeconomic Policies under Floating Exchange
Rates

9.4.1 Effects of Fiscal Policy under Floating Exchange Rates

9.4.2 Effects of Monetary Policy under Floating Exchange
Rates

9.4.3 Mundell Incompatible Trinity

Chapter 10 International Transmission and Coordination of
Macroeconomic Policies

10.1 International Transmission of Macroeconomic Policies under
Fixed Exchange Rates

10. 1. 1 Two-Nation Mundell-Fleming Model

10.1.2 International Transmission of Fiscal Policy under Fixed
Exchange Rates

10.1.3 International Transmission of Monetary Policy under Fixed
Exchange Rates

10.2 International Transmission of Macroeconomic Policies under
Floating Exchange Rates

10.2.1 International Transmission of Fiscal Policy under Floating
Exchange Rates

10.2.2 International Transmission of Monetary Policy under
Floating Exchange Rates

10.3 International Transmission of Inflation

10.3.1 Price Adjustment Mechanism of Inflation Transmission

10.3.2 Balance of Payments Mechanism of Inflation
Transmission

10.3.3 Interest Rate Transmission Mechanism

10.4 International Policy Coordination and Monetary
Cooperation

10.4.1 International Coordination of Macroeconomic Policies

10.4.2 International Monetary Cooperation

Chapter 11 International Factor Movements and Multinational
Enterprises

11.1 International Movement of Labor

11.1.1 Motives for International Labor Movement

11.1.2 Economic Effects of Labor Movement

11.1.3 Other Welfare Effects of International Labor Movement

11.2 International Movement of Capital

11.2.1 Data on International Movement of Capital

11.2.2 Motives for International Capital Movement

11.2.3 Economic Effects of Capital Movement

11.3 Multinational Enterprises and Foreign Direct Investment
Theories

11.3.1 Multinational Enterprises

11.3.2 Foreign Direct Investment Theories