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

TWO COUNTRIES COMPETING IN A THIRD 99 In the U. S. » » ; S ”’ England ” England ”.Russia I ” Russia 10 10 days’ labor 10 ’ Wages "ER DAY $2.00 0 } Ni TorAL WaGEs 20.00 CNN ©.50 = & Sit } PropuUuce 20 wheat 1 cloth '0) wheat v cloth 10 wheat 10 cloth DowmEesric SuprpLYy PRICE $1.00 $1.00 31.25 0.831 21.00 21.00 The supply price of wheat is the same in the United States and Russia ($1.00), and wheat will sell at that price not only in these countries, but in England also. Russia cannot undersell the United States in wheat, even tho her wages are but half of Ameri- can wages; since the effectiveness of her labor is also one-half. Cloth is produced at a cheaper price in England than in the other two countries; and English cloth will be exported to both, and will be sold in both at the same price — $0.83%. The American purchasers, tho they pay for the English cloth the same price as the Russians, have money incomes twice as large, and therefore are better off as purchasers. Their better situation, however, is obviously due to the same cause as the generally larger prosperity of the United States; it is the result of the greater effectiveness of labor in wheat. So far as concerns the terms on which the United States gets her cloth from England, she is on precisely the same footing as Russia. Construct now an international balance of payments based on these price relations. Suppose that : Russia and the United States (between them) buy from England 15 million cloth at $0.83} = $12,500,000 Russia and the United States (between them) sell to England 123 million wheat at $1.00 = £12.500.000 The two money totals are the same. An equilibrium of payments is established, foreign exchange is at par, no specie moves, the wheat and the cloth pay for each other. Wheat to the amount of 125 million bushels is exchanged for cloth to the amount of 15 million yards. That is, 123 wheat = 15 cloth, or 10 wheat = 12 cloth Of the possible terms of trade (10 wheat for anything more than

Access restriction

Copyright

fullscreen: International trade

Monograph

Chapter

Table of contents

Download

Monograph

Chapter

This page

Image fragment

Citation links

Citation recommendation