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

TWO COUNTRIES COMPETING IN A THIRD 105 The barter terms of trade would obviously be 10 wheat = 10.7+ of cloth; this being the ratio in terms of physical units of the price relations — $0.93 for cloth and $1.00 for wheat. That 1s, 10 wheat exchange for less than 13 cloth. Trade on this basis, as we have seen, gives a large share of the possible gain to England and Ger- many ; a comparatively small one to the United States, even tho one sufficient to make the exchange of some advantage to her. (2) Let the figures now be shifted in such manner as to conform to terms of trade under which 10 wheat exchange for more than 13 of cloth. For simplicity, we keep the United States figures as they were before, as regards money wages and the domestic supply prices of goods, confining the readjustments to the other countries. In the U. S. » » U. S. "England ” England Germany Germany 27 eg Wages -or TY Torar Probuce ") wheat cloth wheat cloth 1) wheat 13 cloth Domesric SurprLy PRICE ®1.00 00 10 73 & .00 0.77 Wages have now fallen in England from $1.40 to $1.10, and in Germany from $1.21 to $1.00. The supply prices of English and German goods have fallen correspondingly. Such is the nature of the results to be expected if a change in demand sets in which causes the barter terms of trade to be more favorable to the United States — if more wheat were demanded by England and Germany under the price conditions of Case 1 than was equal in money value to the cloth demanded under those conditions by the United States. Wages and the supply prices of goods are lower in England and Germany than they were before. The domestic supply price of wheat is now the same ($1.00) in Germany as it is in the United States, and wheat would not move between the two. But the price of wheat is lower than its domestic supply price in England ($1.10) and England would import wheat from both Germany and the United States. The domestic supply price of cloth, on the other hand, is lower in England ($0.73) than it is in either Germany (80.77) or the United States ($1.00), and cloth would move from

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