国贸Lecture 1 Introduction.ppt

- Terms of Trade (1/2) N=Px/Pm, Where Px: exports price index, Pm: imports price index Eg. 1, Base year: 2005 2012: Country A’s Px=90%, Pm=120% Then, N2012=(90%/120%)=0.75 * * - Terms of Trade (2/2) I=(Px/Pm)*export quantity index Eg. 1, Base year: 2005 2012: Country A’s Px=90%, Pm=120%, export quantity index for 2011 is 180% Then, I2012=(90%/120%)*180%=1.35 * * * - Trade Intensity TI=(X+I)/GDP * Exports and Imports as a Percentage of U.S/ National Income * * China‘s Trade Intensity：1990-2012 （%） * * 1.2 Issues in International Trade Why do nations trade? (Differences Imperfect Competition) Relative Differences in Labor Productivity Different Technologies Different Factor endowments Different Tastes Increasing Returns to Scale Imperfect Competition First-mover advantage, random * * 1.2 Issues in International Trade Effects of Trade on Economic Structure On production On consumption Gain from Trade Trade is non-zero-sum, there are mutual gains to trade. But trade gains may be unequally distributed within a country. * * 1.2 Issues in International Trade Trade Protection Attempts by government to shield economy from trade hurt welfare generally, but may improve welfare of sectors. * * 1.3 Basic Analytical Instruments and Methods Positive Economics is concerned with what is. It is concerned with the way the economic system functions and the effects of changes in some variables on other magnitudes. Three steps in constructing a useful positive-economic theory (analysis and prediction) (1) the development of framework for analysis (concepts and definitions) (2) the construction of various hypotheses (useful abstractions from reality) (3) the empirical testing of the hypothesis * * 1.3 Basic Analytical Instruments and Methods Normative Economics is concerned with what ought to be. Normative Economics, by definition, it requires value judgments. It is involved both with the selection of rules to judge welfare changes and with the evaluation