Description
Book SynopsisInternational Economics in the Age of Globalization provides the intellectual basis for an understanding of the increasingly integrated world economy. The requisite background is not solely economic theory, but includes the history and the purposes and workings of the organizations, laws, instruments, and customary practices in the international economy. Economic theory is not limited to the abstract; its concern with institutions has both a practical and theoretical base. How can one evaluate a criticism of the World Trade Organization, a fear of the dangers of financial derivatives, the supposed freedom of a multinational firm, or the presumed unfairness of dumping without knowing both theory and institutions? Where did these institutions come from? What problems are they solving-as well as creating? This book's balance between theory and institutions is akin to texts in Public Expenditure or Money and Banking. The leading international economics texts, in contrast, push the real world into the background and present the subject as a more specialized intermediate theory course, accessible only to people who have a solid theoretical background. The result is that good discussions of many of the key issues in modern international economics simply are not available in the curriculum, or accessible to any but economics majors. This book aims to remedy that failing, challenging economics majors and non-majors alike. It will also be of value to students of business and public affairs and to the economic-literate general public.
Table of Contents1. The Nature of International Economics Globalization International Economics in Daily Life The Growth of Economic Interdependence Statistics with Some Grains of Salt Looking Forward Vocabulary and Concepts / Questions Notes Part I: International Trade 2. The Theory of Comparative Advantage The Gains from Trade in General Equilibrium The Gains from Trade in Partial Equilibrium Relaxing the Assumptions Conclusion Appendix: Offer Curves Vocabulary and Concepts / Questions Notes 3. The Sources of Comparative Advantage Factor Proportions: The Heckscher-Olin Model Two Challenges to the Heckscher-Olin Model Why Trade Arises among Similar Countries Segmented Markets as an Explanation for Trade What Could Trigger the Direction of Specialization? Dislocation and Intraindustrial Trade Conclusion Vocabulary and Concepts / Questions Notes 4. Tariffs, Quotas, and VERs Tariffs Analysis of Tariffs: Their Effects Quotas and Their Economic Effects Voluntary Export Restraints Appendix: The Terms-of-Trade Effect in General Equilibrium Vocabulary and Concepts / Questions Notes 5. The Face of Modern Protectionism Subsidy and Tax Issues Administrative Protection Technical, Health, Safety, and Environmental Standards How Can Distortions To Trade Be Compared? Playing the Protectionist Instruments Conclusion Vocabulary and Concepts / Questions Notes 6. The Political Economy of Trade Barriers A Short History of Trade Policy The Uruguay Round and the World Trade Organization Why Do Countries Persist in Protectionism? The Arguments for Trade Barriers Conclusion Vocabulary and Concepts / Questions Notes 7. Unfair Trade Practices Dumping Subsidies Other Unfair Trade Practices Conclusion Vocabulary and Concepts / Questions Notes 8. National Trade Policies Managed Trade Strategic Trade Policy Japanese Use of a National Trade Strategy Adjusting to Trade as a National Strategy Trade Sanctions Vocabulary and Concepts / Questions Notes 9. Economic Integration The Types of Economic Integration The Great Debate: Trade Creation or Trade Diversion Dynamic Effects of Economic Integration A Checklist of Conditions for Welfare Improvement The Major Examples of Economic Integration Very Large PTAs PTAs with a Rich Patron Regional Trade Arrangements in the LDCs Foreign Trade Zones: Little Bits of Free Trade Conclusion Vocabulary and Concepts / Questions Notes Part II: International Macroeconomics: Saving, Growth, and Finance 10. Saving, Investment, and the Trade Balance How Can Countries Have Trade Imbalances? The Three Real Imbalances: Imports-Exports, Saving-Investment, and Output-Absorption Financial Markets: Borrowing and Lending Trade Imbalances as Problems and Symptoms Total Investment Equals Total Savings The International Capital Market and National Saving Government Savings and Trade Deficits: The Twin Deficit Question Private Saving Conclusion Appendix: Where to Find the Numbers Vocabulary and Concepts / Questions Notes 11. The Balance of Payments Why Study the Balance of Payments? What a Balance-of-Payments Statement Shows Balance-of-Payments Accounting The Structure of the Balance of Payments Using Balance-of-Payments Statements as Analytical Tools The World Deficit Conclusion Vocabulary and Concepts / Questions Notes 12. Income and Price Effects Income and Price Changes Income Effects Some International Implications Price and Income: Two Intriguing Cases Conclusion Vocabulary and Concepts / Questions Notes 13. Interest Rates, Prices, and Foreign Exchange The Foreign Exchange Market The Vast Sums Traded Interest Rate Parity The Longer Run: Price Levels and Purchasing Power Parity International and Domestic Financial Markets Conclusion Vocabulary and Concepts / Questions Notes 14. Money in the Global Economy Three Ways of Looking at Money's Relation to Real Output Modeling the Effects of Money Supply Markets for Funds and Markets for Liquidity Monetary Policy National Money Supplies and Global Flows The Role of Money in Correcting Serious Balance-of-Payments Difficulties The Problem of Large Capital Flows Monetary and Fiscal Policy Together Conclusion Vocabulary and Concepts / Questions Notes 15. Exchange Rate Adjustment What Countries Really Do The Role of the Exchange Rate in Adjusting to Payments Difficulties Exchange Control The Once-and-for-all Devaluation after Great Inflation Revaluation (Upward Valuation) Price Sensitivity: What Happens When Price Effects Work Slowly Exchange Rate Changes and the EXIN Model Conclusion Vocabulary and Concepts / Questions Notes 16. International Financial Markets The Functions of Financial Markets The Advantages of Large Markets An Overview of the International Markets Eurodollars, T-accounts, and Monetary Expansion Derivative and Swap Markets Continuing Changes in the International Capital Market Implications of the Changes Conclusion Vocabulary and Concepts / Questions Notes 17. International Monetary Institutions (I) The International System under the Gold Standard The 1920s: Pegged Exchange Rates The Great Depression The Bretton Woods System: 1947-1973 Reserve Currencies Special Drawing Rights Borrowing Swap Lines The End of the Bretton Woods System The Bretton Woods System: An Assesment Vocabulary and Concepts / Questions Notes 18. International Monetary Institutions (II) The Oil Crises Floating Exchange Rates The Debt Crisis Currencies and Governments: How Many Currencies? Deja Vu All Over Again Vocabulary and Concepts / Questions Notes 19. Multinational Firms, Foreign Direct Investment, and Globalization Foreign Direct Investment and the Multinational Firm FDI in Recent Years The Theory of Foreign Direct Investment Possible Reasons for the Recent Increase in FDI Extent of the Firm's Freedom from Market Constraints Issues MNFs Raise Conclusion Vocabulary and Concepts / Questions Notes Index
