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

[02 INTERN ATIONAL TRADE will take twice as much of cloth at the same price as either of them would take alone; and the barter terms of trade will become more favorable to England. Turn now to a case of a different kind, and one more complicated. [t is exemplified by the following figures : Domestic TERMS OF TRADE In the U. S. 10 days’ labor produce 20 wheat | 102 2” ” 20 cloth (10 wheat = 10 cloth In England 10 ” i 10 wheat | - 10 ” 2) 2} 15 cloth (10 wheat = 15 cloth In Germany 10 ” 22 ” © 10 wheat | ky 10 a ’) 7) 13 cloth 7 10 wheat = 13 cloth Here each of the countries has a situation as regards the relative costs of the two articles which is different from that of either of the others. The United States has a comparative advantage over both England and Germany in wheat, and might exchange wheat for cloth with either or with both. England has a comparative advantage in cloth not only as against the United States but as against Germany also; and she might send cloth to either in exchange for wheat. Germany might send cloth to the United States in exchange for wheat; but she might also send wheat to England in exchange for cloth. The limits within which the barter terms of trade thruout the trading area could establish themselves are 10 cloth for 10 wheat at the lowest, 15 cloth for 10 wheat at the highest. At any rate between these limits (¢.e. wheat exchanging at the rates of 11, 12, 13, 14 for cloth) there will be trade. But which of these several possibilities will emerge ? The situation is essentially the same as that considered in the first part of this chapter ; indeed, is no more than a variant. The answer again is that the outcome depends on the state of demand be- tween the countries. As before, there are three possible cases. (1) Suppose the barter terms of trade to be unfavorable to the United States — such as would exist if the demand of the United States for cloth were great, the demand of England and Germany for wheat small. Suppose it to be 10 wheat for 11 cloth. Both Germany and England would then send cloth to the United States,

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