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

Usage license:: Get license information via the feedback formular.

Chapter

Document type:: Monograph

Structure type:: Chapter

Title:: Part I. Theory

Collection:: Economics Books

04 INTERNATIONAL TRADE Me i Og Consider now the barter terms of trade which obtain under these circumstances. In both countries wheat sells for $1.00 and cloth for $0.66%, these being the “world prices.” In terms of commod- ities, 10 of wheat exchange for 15 of cloth. The five days’ labor which in the United States produce 10 of wheat would yield, if applied to cloth, 10 of cloth also; the United States, getting 15 of cloth for her 10 of wheat, gains 5 of cloth. Germany, on the other hand, gains 3 of cloth. With 10 days’ labor she could pro- duce 18 of cloth or 10 of wheat; with only 15 of cloth she gets 10 of wheat. Linen sells for $0.80 in both countries; with wheat at $1.00 the terms of trade are 12% of linen for 10 of wheat. The United States gets 12% of linen for 10 of wheat, the product of 5 days’ labor, whereas that labor would produce at home only 10 of linen. The gain is 2; of linen for the United States. And Germany gains the same: the difference between 15 of linen and 121%. (2) Next, assume barter terms of trade between the two countries which are more favorable to Germany ; the evidence of the more favorable terms being higher money wages in that country. Sup- pose German wages to be not at a figure somewhat low ($1.20), but much higher, say $1.60. Wages in the United States we assume to remain at $2.00. Then we have : In the U. S. » )) U. S )) » i. S. ”’ Germany 1 ”’ Germany 10 ” Germany 10 10 devs’ lahor BD) 7) J J) )) 9 7) 1» WAGES PER DAY $2.00 $2.00 $2.00 $1.60 $1.60 $1.60 ToTAL WAGES $20 $20 $20 $16 $16 $16 PRODUCE 20 wheat 20 linen >) cloth 10 wheat 15 linen 18 cloth DowMmesTic SuppLy PRICE $1.00 $1.00 $1.00 $1.60 $1.062 $0.89 Both wheat and linen are now cheaper in the United States than in Germany. The difference, of course, is greater for wheat, whose domestic supply price in Germany is $1.60, whereas it can be got from the United States for $1.00. Linen can be produced in Ger- many at a money cost of $1.06%; but it is obtainable from the United States at a slichtly lower figure — $1.00. Cloth still moves

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