International trade

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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

ABSOLUTE DIFFERENCES IN COST 9 it is here that the fundamental problems appear. Let the reader attend to the phrase “barter terms of trade,” prepare for its recurrence, bear in mind its meaning. A word of explanation on this matter of phraseology may be helpful. “Terms of trade” was suggested by Marshall.! “Terms of exchange,” which at first may seem better, is confusing, for the reason that “exchange” is so constantly used in connection with the price of “bills of exchange” and the rates of “foreign ex- change.” Unfortunately there is nothing in the English tongue that corresponds to the German “Devisen.” As in so many other problems of economics, we have retained the ways of common speech, and we designate by the same word — “exchange” — quite different things. The possibilities of misunderstanding will be lessened if we use the phrase “terms of trade” to designate the fundamental process of the traffic of goods for goods, and restrict the use of “exchange” as much as possible to bills of exchange and to dealings in them. To reduce still further the possibilities of misunderstanding, I have modified Marshall's phrase in the manner stated above, and shall speak of the “barter terms of trade.” Returning to our analysis, we simplify it by neglecting cost of transportation. The most obvious effect of cost of transportation is to narrow somewhat the range within which the terms of ex- change are confined. If it costs one of copper to carry each batch of copper from the United States to Germany, and also costs one of copper to carry each batch of linen from Germany to the United States, the limits within which the exchange can take place will be 8% and 29 of copper for 15 of linen, not 7% and 30. At any figure above 8% Germany will still gain; at any figure below 29 the United States will still gain. There are some further and less obvious complications from the introduction of cost of transpor- tation, to which the older economists gave much attention and of which something will be said as we proceed.” All the complications from this factor, obvious or obscure, do not affect the essentials of t Money Credit and Commerce, Book III, Ch. VI and passim. 2 See below, p. 135.

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