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

106 INTERNATIONAL TRADE ay bE England to both. The price of wheat thruout the trading area would be $1.00, the price of cloth $0.73. The terms of trade in physical units would be the ratio of those figures, that is 10 of wheat for 13.7 of cloth — more than 13 of cloth for 10 of wheat. And Germany would no longer be an exporter of cloth to the United States, but an exporter of wheat to England.! (3) Readjust finally in such way that the money wages and the supply prices correspond to barter terms of 10 wheat for 13 cloth. We still keep wages and prices in the United States at the original figures, confining the shifts to the other countries. In the U. S. 10 days’ labor 2) )) vu. S. 10 3) ” England 10° °°’ : i’ England 10%” 2 ” ‘Germany 10 7” 2 » Germany 10 7” 2 WAGES ER DAY $2.00 $2.00 @l.15 51.15 $1.00 $1.00 ToTAL WAGES 220 220 11 5p © 50 < 2 ) $10 PropUuCE 20 wheat 20 cloth 10 wheat 15 cloth i0 wheat 13 cloth DomEesTIC SUPPLY PRICE $1.00 $1.00 $1.15 $0.77 $1.00 $0.77 Under these conditions England and the United States exchange wheat and cloth; since the supply price of wheat in the United States ($1.00) is lower than that of wheat in England ($1.15); while the supply price of cloth in England (80.77) is lower than that of cloth in the United States ($1.00). English cloth will be sold in the United States and England at $0.77, and American wheat will be sold in both at $1.00. The barter terms of trade will be 10 wheat for 13 of cloth (the ratio in physical units of the price rela- tions $0.77 and $1.00). Germany, however, can find no advantage from participation in trade on these terms. If indeed Germany and the United States alone were confronted with each other, trade would arise between them. Tho wheat is at the same price in both ($1.00), cloth is at $0.77 in Germany and at $1.00 in the United States ; cloth would 114 will be observed that in Case 2 the wages relations of the countries are different from what they were in Case 1. In that earlier case, wages in England were $1.40, in Germany $1.21; that is, in the ratio of 15 to 13, which is the ratio of the effectiveness of labor in the two countries for the article exported (15 cloth for 10 days’ labor in England, 13 cloth in Germany). In Case 2 wages in the United States are $2.00, in Germany $1.00, that being again the ratio of the effective- ness of labor in the exported article (20 wheat for 10 days’ labor in the United States, 10 wheat in Germany).

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