Global Markets and
Competition�
3rd
edition
Description��������� Introduction
This international
economics text integrates micro and macro economics.� Graphs and exercises make the theory
accessible.� Hundreds of boxed examples
make the theory relevant.� The emphasis
is on the gains from international competition and the limited scope of
government policy.��
Global Markets and Competition
International
economics describes and predicts production, trade, and investment across
countries. Wages and income rise and fall with international commerce even in
the large rich developed US economy.� In
many small less developed countries, international economics is the only game
in town.�
Economics
as a social science began in Europe in the 1700s in debates over free
international commerce, and the debate continues.� This text develops the foundations of
international trade and investment, including constant cost, neoclassical,
factor proportions, and industrial organization theories of production and
trade.� Government policies are designed
to influence trade and investment for favored industries, and governments
negotiate free trade and investment agreements.�
Theory is
presented using graphs and numerical examples.�
Numerous problems lead to a thorough understanding.� Over 250 examples illustrate the theory.� The text integrates issues of microeconomic
trade, economic policy, and international finance and macroeconomics.� Emphasis is on the powerful forces of
international markets and the ultimate limitations of government stopgap
policy.
Global Markets and Competition
This text
prepares you to anticipate how international economics will influence your
business and personal life.� Countries have
become more integrated through increased international trade, foreign
investment, migration, and more efficient transportation and
telecommunication.� The foreign exchange
market is the largest market in the world.�
Industries prosper and fail in the face of global competition.� International agreements such as the World
Trade Organization (WTO), North American Free Trade Area (NAFTA), and European
Union (EU) are becoming a fundamental form of government.
Government
policy protects some favored industries from the pressures of international
competition and subsidizes others for export, at the expense of everyone in the
economy.� Tax policies are designed to
hinder trade and investment. Government central banks interfere with the
foreign exchange market.� Such policy
maneuvers impede international commerce and lower average income in the
economy.
This text
focuses on the foundations of international economics in the system of
international markets.� In
microeconomics, an economy is a collection of interdependent markets.� In international economics, markets and
economies are linked across borders.�
International economics is based on the supply and demand for goods and
services across countries.�
Comparative
advantage is the basic tool for predicting the international pattern of
production. The international supply of traded products is based on underlying
production.� The production and trade of
minerals and agricultural goods are based on geographical advantages.� For traded manufactured goods and services,
capital is an important input that can be installed where there is labor and
infrastructure.
Trade
occurs due to the arbitrage of products from countries where prices are low to
places where prices are high. Through arbitrage, traders make profit and products
are more economically distributed.�
International demand is based on income and tastes.� The interaction of international supply and
demand determines production and trade.
The effects
of trade depend partly on the types of industries involved, from competition to
monopoly. Trade policies are designed to redistribute income toward some
favored industry or group, altering the efficient pattern of production and
distribution.� The costs of protection
outweigh the benefits, but industry and labor groups lobby for protective
tariffs and quotas because they stand to gain while others pay.� Politicians respond to lobby payoffs as well
as political pressure.
International
economics builds models to capture the essence of international commerce.� The fundamental scientific models of
international economics have stood the test of time.� Models are tested and refined as more is
learned about how the international economy works.
The graphs,
examples, applications, and problems in this text are essential for learning.� There are hints for even numbered problems in
the back of the book.� You will enjoy International Economics: Global Markets and
Competition.
Themes of International Economics: Global Markets and
Competition are:
The
text is unique in several ways.
The text is
appropriate for "service" courses for non-majors.� Numerous boxed examples make the text
suitable for MBA students.� Technical
points are made with numerical examples and graphs, avoiding
"formulas" and algebraic symbols.�
Classroom presentations should use diagrams and algebra.� The problems after each section and chapter
are designed for learning and are classroom tested.� Hints for even numbered problems are in an
appendix.� Students can be called on to
answer or work problems at the board to get them involved.
You will be
surprised at how well your students learn using International Economics: Global Markets and Competition.
I.� MARKETS & TRADE
1. International Markets
A. International
markets and prices
B. Excess
supply and demand
C. The
balance of trade
D.
Comparative advantage and specialization
2. Trade with Constant Costs
A. Constant
opportunity cost of production
B.
Specialization and gains from trade
C.
Extensions of constant cost trade theory
D.
Applications of constant cost trade theory
II.� TRADE, PROTECTION, AND THE TERMS OF
TRADE
3. The Gains from Trade
A. The
production possibilities frontier and real income
B.
Specialization with increasing costs
C. Economic
development and trade
D.
Industrial trade policy
4. Protectionism
A. Tariffs:
Taxes on imports
B. Quotas
and other nontariff barriers
C.
Protection and production
D.
Political economy of protection
5. Terms of Trade
A. Offer
curves
B. Tariffs
and the terms of trade
C. Tariff
games
D.
Nonrenewable resources
III.� PRODUCTION & TRADE
6. Production and Factor Proportions
A. Specific
factors of production
B.
Production with two factors and two goods
C. Four
theorems of production and trade
D. Applying
factor proportions trade theory
7. Industrial Organization and Trade
A. Price
searching firms
B. Intraindustry trade
C.
Oligopolies
D. Other
trade models
IV.� INTERNATIONAL FACTORS & ECONOMIC
INTEGRATION
8. International Labor &
Capital
A.
International migration
B.
International investment
C.
Migration, foreign investment, and income redistribution
D.
Migration, foreign investment, and trade
9. International Economic Integration
A.
Multinational firms
B.
International externalities
C.
International political economy
D. Steps of
economic integration
V. INTERNATIONAL MONEY,
FINANCE, AND MACROECONOMICS
10. Balance of Payments
A. Price elasticities and the trade balance
B. Current
and capital accounts
C. Deficits
and surpluses
D.
International fiscal and monetary policy
11. Foreign Exchange Markets
A. Foreign
exchange rates
B. Managed
exchange rates
C. Foreign
exchange trading
D. Foreign
exchange risk
12. International Financial Markets
A.� International markets for loans
B.� Foreign exchange and finance
C.� International money
D.� Money and international finance
13. Open Economy Macroeconomics
A.� The micro foundations of macroeconomics
B.� Closed economy macroeconomics
C.� The open macroeconomy
D.� Inflation, exchange rates, and open economy
macro policy