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

IMPORT DUTIES AND TERMS OF TRADE 143 Observe that while price rises to the consumer, the total sum which is paid to the foreign producer will not rise. The quantity bought from the foreigner — the number of units of the commodity which are purchased from him — becomes less, while the price per unit paid to him will not rise. True, because of the duty the consumer will pay a higher price. But the addition to the price goes to the government; it has nothing to do with the price re- ceived by the foreign exporter. Imports will decline, not because a larger price has to be paid to the foreigner for the goods but because an addition to the foreigner’s price must be paid in order to meet the tax imposed at home. The extent to which imports then decline will depend on the degree in which the demand for the commodity is elastic — whether the elasticity of demand is less or greater than unity. If demand be inelastic, the consumer will continue to buy nearly the same quantity as before. Imports will decline but little. The total sum spent for the article by the consumers will be greater than before, and the government will secure a large revenue from the tax. If on the other hand demand be elastic, the consumer will be led to lessen his purchases of the article very consider- ably, and the total sum spent for it will shrink. Then imports decline heavily, and the revenue which the tax yields to the gov- ernment becomes correspondingly less. But, to repeat, in any event imports will decline somewhat. And that decline at once sets in motion a train of forces which diminish the volume of international trade and at the same time cause the barter terms of trade to be more favorable to the country imposing the duties. Suppose the tax-imposing country to be the United States. That country’s imports for the time become less. Exports, however, remain as great as before. Specie flows in, prices and money incomes rise. In foreign countries the opposite conse- quences ensue. Specie flows out, prices and money incomes fall. The reader will readily follow the further consequences. As money incomes rise in the United States, consumers will be led to spend more on imported goods. They will buy more of other imports (those which are not taxed) since these become cheaper as prices

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