Globalization of Economic Activity Waves of Globalization
First Wave of Globalization: 1870-1914
Second Wave of Globalization: 1945-1980
New Wave of Globalization Foreign Competition and the U.S.
Auto Industry The United States as an Open Economy Why Is Globalization Important? Competition in the World Steel Industry
Common Fallacies of International Trade
What Makes a Company “American”?
International Competitiveness Firm (Industry) Competitiveness A Nation's Competitiveness Globalization and Competitiveness
Has Globalization Gone Too Far?
The Plan of This Book
Summary
Study Questions
Part 1: International Trade Relations
Chapter 2
Foundations of Modern Trade Theory
Historical Development of Modern Trade Theory The Mercantilists
Why Nations Trade: Absolute Advantage Why Nations Trade: Comparative Advantage Where Does U.S. Comparative Advantage Lie?
Comparative Advantage in Money Terms Production Possibilities Schedules Trading Under Constant-Cost Conditions
Constant Costs
Basis for Trade and Direction of Trade Production Gains from Specialization Consumption Gains from Trade Distributing the Gains from Trade Complete Specialization
Productivity and Comparative Advantage Changing Comparative Advantage
Trade Restrictions
Trading Under Increasing-Cost Conditions Increasing Costs Increasing-Cost Trading Case
Partial Specialization Comparative Advantage Extended to Many Products and Countries More Than Two Products
More Than Two Countries Summary Study Questions
Chapter 3
International Equilibrium
Indifference Curves
Equilibrium in the Absence of Trade A Restatement: Basis for Trade,
Gains from Trade Equilibrium Terms of Trade
Theory of Reciprocal Demand Terms-of-Trade Estimates Summary Study Questions
Chapter 4
Trade Model Extensions and Applications
Factor-Endowment Theory
Factor-Price Equalization
Trade and the Distribution of Income The Heckscher-Ohlin Theory:
U.S-China Trade Does Trade Make the Poor Even Poorer?
Explaining Wage Inequality
Evidence on Wage Inequality
Policy Implications Are Actual Trade Patterns Explained by the
Factor-Endowment Theory?
Economies of Scale and Specialization Theory of Overlapping Demands Intra industry Trade Product Cycles
Pocket Calculators and the International Product Cycle Dynamic Comparative Advantage:
Industrial Policy Summary Study Questions
Chapter 5 Tariffs
The Tariff Concept Types of Tariffs
Specific Tariff
Ad Valorem Tariff
Compound Tariff Smuggled Steel Evades U.S. Tariffs
Effective Rate of Protection Tariff Escalation
Production Sharing and Offshore-Assembly Provision
Postponing Import Duties
Bonded Warehouse
Foreign-Trade Zone Tariff Welfare Effects: Consumer Surplus and Producer Surplus
Tariff Welfare Effects: Small-Nation Model Calculating the Welfare Effects of a Tariff
Tariff Welfare Effects: Large-Nation Model Preserving a Production Worker's Job Tariff Examples
Lamb Tariffs Fleece U.S. Consumers
Motorcycles
Japanese Luxury Cars Who Pays for Import Restrictions? Effects of Eliminating Import Tariffs
Chapter 6
Nontariff Trade Barriers
Import Quota
Trade and Welfare Effects
Allocating Quota Licenses
Sugar Import Quotas Quotas Versus Tariffs Tariff-Rate Quota: A Two-Tier Tariff Orderly Marketing Agreements Steel-Using Industries Oppose
Restrictions on Steel Imports
Export Quota Effects
Japanese Auto Restraints Put Brakes on U.S. Motorists Domestic Content Requirements Subsidies
How a Tariff Burdens Exporters
Arguments for Trade Restrictions
Job Protection
Petition of The Candle Makers
Protection Against Cheap Foreign Labor
Fairness in Trade: A Level Playing Field
Maintenance of the Domestic Standard of Living
Equalization of Production Costs
Infant-Industry Argument
Noneconomic Arguments Summary Study Questions
How “Foreign” Is Your Car?
Domestic Subsidy
Export Subsidy Dumping
Forms of Dumping
International Price Discrimination Antidumping Regulations Other Nontariff Trade Barriers
Government Procurement Policies
Social Regulations
Sea Transport and Freight Restrictions Summary Study Questions
Chapter 7
Trade Regulations and Industrial Policies
Smoot-Hawley Act
Reciprocal Trade Agreements Art
General Agreement on Tariffs and Trade
The GATT System
Multilateral Trade Negotiations World Trade Organization
Settling Trade Disputes
Does the WTO Reduce National Sovereignty?
Does the WTO Harm the Environment?
A New Round of Trade Negotiations for the WTO
The Battle in Seattle
From Seattle to Doha Trade Promotion Authority
(Fast-Track Authority) The Escape Clause
Bush's Steely Pragmatism Countervailing Duties
Lumber Quotas Hammer Home Buyers Antidumping Duties
The Prevalence of Antidumping Action
Chapter 8
Trade Policies for the Developing Nations
Developing-Nation Trade Characteristics Trade Problems of the Developing Nations
Unstable Export Markets
Worsening Terms of Trade
Limited Market Access Fair-Trade Movement Helps Poor Coffee
Farmers
Call for a New International Economic Order
Generalized System of Preferences
Remedies Against Dumped and Subsidized Imports Section 301: Unfair Trading Practices
Europe Slips in Banana Dispute Protection of Intellectual Property Rights Trade Adjustment Assistance Will Wage Insurance Make Free Trade
More Acceptable to Workers?
Industrial Policies of the United States Export Promotion and Financing
Industrial Policies of Japan
Has Industrial Policy Helped Japan?
Strategic Trade Policy
Imperfect Competition and Government Subsidies
Welfare Effects of Strategic Trade Policy Economic Sanctions
Factors Influencing the Success of Sanctions
Summary
Study Questions
Stabilizing Commodity Prices Production and Export Controls Buffer Stocks
Can All Developing Countries Achieve Export-Led Growth? Summary Study Questions
Chapter 9
Regional Trading Arrangements
Types of Regional Trading Arrangements Impetus for Regionalism Effects of a Regional Trading Arrangement Static Effects
Did Britain Gain from Entering the European Union? Trade Creation Versus Trade Diversion
Dynamic Effects European Union
Pursuing Economic Integration
The EMU Presents Different Faces to Portugal and Sweden
Agricultural Policy
Government Procurement Policies
European Union Enlargement Economic Costs and Benefits of a Common
Currency: The European Monetary Union
Optimum Currency Area Euro Facts
Europe as a Suboptimal Currency Area
Challenges for EMU
EMU and the United States
North American Free Trade Agreement (NAFTA)
Do Developed Countries Gain from Trade Liberalization with Developing Countries? NAFTA's Benefits for Mexico and Canada NAFTA's Benefits and Costs for the United States
NAFTA’s Trade and Employment Effects Trucking Restrictions Put Brakes on NAFTA Trade
Is NAFTA an Optimum Currency Area? Free Trade Area of the Americas Regional Integration Versus Multilateralism Transition Economies
Industrial Cooperation
The Transition Toward a Market-Oriented Economy Summary Study Questions
Chapter 10
International Factor Movements and Multinational Enterprises
The Multinational Enterprise Motives for Foreign Direct Investment
Demand Factors Mexico Attracts Fortune Brands with
Low Wages
Cost Factors Supplying Products to Foreign Buyers: Whether
to Produce Domestically or Abroad
Direct Exporting Versus Foreign Direct Investment/Licensing
Foreign Direct Investment Versus Licensing
International Trade Theory and Multinational Enterprise
Japanese Transplants in the U.S. Automobile Industry Do U.S. Multinationals Exploit Foreign
Workers? International Joint Ventures
Part 2: International Monetary RELATIONS
Chapter 11
The Balance of Payments
Double-Entry Accounting Balance-of-Payments Structure International Payments Process
Current Account
Capital and Financial Account
Statistical Discrepancy: Errors and Omissions
VS. Balance of Payments
What Does a Current Account Deficit (Surplus) Mean?
Net Foreign Investment and the Current Account Balance
Welfare Effects Multinational Enterprises as a Source
of Conflict
Employment
Technology Transfer
National Sovereignty
Balance of Payments
Taxation
Transfer Pricing U.S. Production Sharing with Mexico International Labor Mobility: Migration
Effects of Migration
Immigration as an Issue
Immigration and the U.S. Labor Market Summary Study Questions
Impact of Financial Flows on the Current Account
Is a Current Account Deficit a Problem? Do Current Account Deficits Cost Americans Jobs?
Business Cycles, Economic Growth,
and the Current Account Can the United States Continue to
Run Current Account Deficits Year
After Year?
Balance of International Indebtedness United States as a Debtor Nation. Summary Study Questions
Chapter 12 Foreign Exchange
Foreign-Exchange Market
Types of Foreign-Exchange Transactions
Interbank Trading
Traders Run Currency Markets
Bravo for Franc Trader
Russian Influence
Difficult Stretch
Reading Fed Signals
The Role of Luck
Reading Foreign-Exchange Quotations
Weak Euro Is Bonanza for American Tourists
Forward and Futures Markets
Foreign-Currency Options
Advantage of Foreign-Currency Options to Exporters
