International trade

Bibliographic data

Monograph

Identifikator:: 1758394757

URN:: urn:nbn:de:zbw-retromon-136209

Document type:: Monograph

Author:: Taussig, Frank William http://d-nb.info/gnd/120199459

Title:: International trade

Place of publication:: New York, NY

Publisher:: Macmillan

Year of publication:: 1927

Scope:: XXI, 425 Seiten; graph. Darst.

Digitisation:: 2021

Collection:: Economics Books

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Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part I. Theory

Collection:: Economics Books

VARYING COSTS; DIMINISHING RETURNS 77 greater the German demand for wheat and the less the American demand for linen, the more favorable to the United States will be the barter terms of trade; the rate between wheat and linen will be nearer to the figure of 15 linen for 10 of wheat. The less the German demand for wheat and the greater the United States demand for linen, the more favorable the terms will be to Germany — the nearer to the figure of 10 of wheat for 10 of linen. The concrete way in which the conditions of exchange will work out will be thru the range of money incomes in the two countries. A rate advantageous to the United States will be attained by the people of that country thru their having higher money incomes, as well as higher domestic prices. American money incomes will be higher than German in any case; but the difference in favor of the United States will be greater or less according to the play of demand in the two countries for wheat and linen. They will gain as pur- chasers of import commodities, such as German linen. If on the other hand the conditions of demand should turn favorable to Germany, money incomes and domestic prices will be given an up- ward trend, and the Germans will secure a larger gain as purchasers of imports, such as American wheat. This is familiar matter; it is restated here by way of introduction to what follows. Suppose now that in Germany all wheat is not produced under the same conditions. Suppose that while 10 days produce 10 of wheat on some lands, there are others on which the 10 days produce more. Grade the lands according as the product of this constant amount of labor is 11, 12, 13, 14, 15 of wheat. The price of wheat will be in accord with its cost on the poorest land in use, that on which the 10 days yield but 10 of wheat. The better lands will vield to their owners differential returns, or economic rent. Under these conditions wheat growing will not cease in Germany after trade with the United States has set in. It would indeed cease if all the wheat were grown under the poorest conditions — were produced at the rate of 10 wheat for 10 days. Germany would then procure her entire supply from the United States in exchange for linen. But as there are varying conditions of supply within her own borders, she would always produce some wheat of her own. The

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