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

ja a'J INTERNATIONAL TRADE The converse supposition — equally permissible under the given conditions — is that money wages are 50 per cent higher in Ger- many. Let them be $1.50 in Germany, $1.00 in the United States. Then we have: WAGES ToraL PER Day WAGES In the U. S. 10 days’ labor $1.00 $10 i 8k D0 | ee ” $1.00 $10 ” Germany 10 ” 2” $1.50 $15 ” Germany 10 ” 2 $1.50 $15 D Propuce Ane a 30 copper $0.333 15 linen $0.663 15 copper $1.00 30 linen $0.50 As before, linen is produced more cheaply in Germany, and flows thence to the United States; copper more cheaply in the United States, and flows to Germany ; but now with copper, not linen, relatively the cheaper of the two. The barter terms of trade are now 15 of copper for 10 of linen, or 22% of copper for 15 of linen. At the price of copper which rules in both countries ($0.33%) the sum of $7.50 will buy 22% of copper; while at the ruling price of linen ($0.50) that same sum will buy 15 of linen. The barter terms of trade have become more advanta- geous to Germany. And this betterment of Germany's gain is in accord with her higher money wages, now 50 per cent above those of the United States. Suppose now that money wages are the same in the two coun- tries. Let them be $1.50 alike in Germany and in the United States. Then we have: In the U. S. 10 days’ labor » » i. S. 10 Jy) 2) ” Germany 10 ” »” ” Germany 10 ” 2 T D oo Toe Wore Propuce Sr Peer $1.50 $15 30 copper $0.50 $1.50 $15 15 linen $1.00 $1.50 $15 15 copper $1.00 $1.50 $15 30 linen $0.50 Yo y Copper moves from the United States to Germany, and linen from Germany to the United States. Exchange of goods takes place, both countries gain, and both countries gain alike. The barter terms-of trade are no more favorable to the one country than the other; they exchange their labor par for par, so to speak. Money wages being the same, the inhabitants of each country have the same degree of benefit from the trade between them.

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