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

114 INTERNATIONAL TRADE Tuan Jar ABE SC ae Cod and indeed are alone to be considered. The net terms cannot be such that the United States gets for her 10 of wheat less than 10 of linen. But the gross terms may be disadvantageous to this drastic extent. The United States in the present case actually gets only 9.2 linen for every 10 of wheat she sends to Germany. True, she gets as much as 10.4 of linen for the money that is paid for every 10 of wheat she exports.! But she sends additional wheat to Germany, which serves for the tribute remittance and brings it about that on the total transactions she gets only the 9.2 linen for every 10 of wheat. And it is these total transactions which are really of significance for her welfare. Germany has no substantive concern in the manner in which the money account is drawn up and the balance of payments is reckoned, in analyzing how much of wheat 1s to be regarded as paying for linen and how much is to be set down for the other remittance. What actually happens is that the United States parts with 10} millions of wheat and receives no more than 9.4 millions of linen. Germany gets much wheat, gives little linen. And this situation persists indefinitely. Year after year — so long as the tribute continues and no other items enter — the United States sends to Germany a large slice of the product of her labor and receives a small slice of the product of German labor. The degree to which the barter terms of trade, both net and gross, are altered to the disadvantage of the United States depends on the conditions of demand. The particular figures just chosen to illus- trate the consequences of a tribute payment were such as would result from a play of demand unfavorable to the United States. They are conditions of inelastic demand in Germany for wheat and of elastic demand for linen in the United States; in more precise terms, conditions in which the elasticity of demand is less than unity in Germany and more than unity in the United States. Tho the price of wheat falls from $0.85 to $0.80, Germany buys but very little more wheat; and she spends on wheat a total sum less than she spent before — $8,200,000 now, $8,500,000 before. In 1 The terms of 10 wheat for 10.4 for linen, it will be noticed, are those which con- form to the prices of wheat and linen in the supposed trade. The price of wheat is $0.80, that of linen is $0.762; the corresponding figures for the barter terms are 10 and 10.4.

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