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

24 LL. eg INTERNATIONAL TRADE They are two forms of comparative advantage, each the comple- ment of the other. Looking again at the figures of our case, it is obvious that in the United States 10 wheat would exchange for 10 linen if both articles were produced within the United States. In Germany 10 wheat would exchange for 15 linen if both were produced in that country. At any rates between, both countries would gain from an exchange. At an exchange of 10 wheat for 14 linen the United States would gain 4 of linen, since the 5 days’ labor entailed by producing the 10 of wheat would produce in the United States not 14 of linen, but only 10. At the rate of 14 linen for 10 wheat, Germany too would gain, but not so much; her gain would be 1 of liner. If on the other hand the terms of trade were 10 wheat for 11 linen, the United States would gain 1 linen and Germany 4 linen. At any rate of 10 wheat for more than 10 linen and less than 15 linen, both would gain. And at any such intermediate rate, each would confine itself to that commodity in which it had a comparative advantage. The United States would produce only wheat, and would get all her linen by sending wheat to Ger- many, exchanging it for linen; she would confine herself to the industry in which she had the superior advantage. Germany would produce only linen, and would get all her wheat by sending linen to the United States and getting wheat in exchange; she would confine herself to the industry in which she had the inferior disadvantage. of Turn now from this supposition to that of a money régime. Suppose that wages in the United States are $1.50 a day; wages in Germany are $1.00 a day. These figures, be it noted again, are merely illustrative; they do not stand for a necessary or definitive outcome. Assuming them for purposes of illustration, we have further : In the U. S. 10 days’ labor )) » i S. 10 2) )) ” Germany 10 ” » "” Germanv 10 7 WAGES PER DAY $1.50 $1.50 $1.00 21.00 TorAL WAGES $15 $15 $10 £10 Probits DowmEesric SuppLy PRICE 20 linen $0.75 20 wheat $0.75 15 linen $0.662 10 wheat £1.00

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