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

TRIBUTE AS EXAMPLE eat i EN 111 linen bought, and the tribute of one million. Foreign exchange is no longer at par; the American exports of wheat no longer yield bills on Germany in amounts sufficient to supply the needs of those who have to remit to Germany. Exchange on Germany rises to a premium in the United States; specie flows to Germany. Prices and money wages fall in the United States, rise in Germany. These changes will go on until a stage of equilibrium is reached, which may be exemplified as follows : In the U. S. 10 days’ lah 2.” U.S. 10 88% ” Germany 10 Germany 10 rr Wages PER Dav at fviy Sl. 10 TorAL Wages ra v1 15} Propuce 20 wheat "linen 10 wheat 15 linen DowmEesTic SuppLY Price $0.80 $0.80 $1.15 $0.762 Wages have fallen in the United States from $1.70 to $1.60 ; they have risen in Germany from $1.02 to $1.05. The money cost of wheat has fallen in the United States from $0.85 to $0.80 and is now considerably lower than the German money cost of wheat ; the money cost of linen in Germany has risen to $0.762 and is now not much lower than the American money cost of linen. At these prices suppose the movement of goods to be - 10% millions of wheat at $0.80 exported from the United States = $8,200,000 9.4 millions of linen at $0.762 exported from Germany = $7,200,000 The exports of wheat from the United States exceed in money value the exports of linen from Germany. The difference is a million dollars, precisely the sum which has to be remitted to Ger- many ; that is, it suffices to yield the volume of bills in Germany which are wanted by those persons (private individuals or public officials) having the remittance in charge. The demand for bills is just met by the supply; foreign exchange is at par; equilibrium has been reached. The equilibrium, it is to be noticed, is one in the “balance of payments,” not one in the “balance of trade.” The payments to be made by the United States to Germany are completely met. But the balance of trade — the balance of merchandise operations — 1s “favorable” to the United States ; her exports of goods exceed

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