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29 Cards in this Set

  • Front
  • Back
Leontief paradox
, greatest piece of evidencea gainsed factor-proportions theory, shows the United States exporting more labor intensive goods than capital intensive.
Factor Price Equalization
as trade causes prices of goods to converge between countries, this causes the relative prieces of factors to converge also.
intertemporal trade
term given for the type of trade that results from financial transactions. It differs because it is trade for a goods today for goods in the future.
why is production in different locations done by the same firm?? tech transfer?
vertical manufactures
all parts and goods produced by one firm, reduces horizontal problems
demand supply relationship
Home Demand - Home Supply = Foriegn supply - foreign demand
complete economic union
effects from old regionalism
trade creation
TOT external and internal
price settign
mr = mc monopoly
p = mc
Duopoly Cournot
how much to sell: BRF
Duopoly Nash
what price to set: becomes competetive
market share maitenence
each sells 50%, stays two monopolies
Stolpher Samuelson
An increase in the price of "labor good" will raise the wages relative to the rent and capital's income.
increase in a factor endowment will increase by a greater proportion the output of the good that uses that factor and reduce the other.
= wage x labor + rent x capital
q = P(1+t)
govt revenue
R = t PM
relation x , m , p
pM = X
Tarrifs equ
t = (q - P)/P
g = 0 ultraprotect
g = 1 saddam
g = m neutral
metzler paradox
if export is elastic, the price will fall as a result of tariff
net investment position
how much borrowing form the world overall
current accounts equ
C = x - pM + E
C = -F

E = dividend payments
Financial accounts
assets sold - assets bought
why multinational
1) ownership advantage - widget patent
2) locational advangtage = must be a reason to produce elsewhere
3) internalization: keep inside, avoid losing tech advantage
new regionalism 5
LDC's are reformers (communism for mkt)
Moderate Liberalization
Deep Integration
Asymmetrical small
trends of trade
Multiliberalization, Fundamental reforms in E&S, more FDI
timeline 4
1) Inside price multilateral policies
special interest groups sacrificed for benefits from trade
2) insides negotiate
outsides go to autarky
3) implement liberalization - expands multiliberalization
outside reevaulate
4) outside choose reform
outside compete for FDI, regionalism is important