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

28 INTERNATION AL TRADE fall and Americans will be tempted still more to buy German linen. On the other hand, as American wheat prices rise, the German purchasers, tho still buying more wheat than before, will gradually slacken in their purchases of the American article. The final outcome will be something like the following : U. S. sends to Germany 10,500,000 bushels wheat at $0.85 = $9,000,000. Germany sends to U. S. 15,000,000 yards linen at $0.60 = $9.000.000. The money sums balance. Imports exactly pay for exports in each country. Foreign exchange is again at par; no specie flows. The barter terms of trade have now become more favorable to the United States. In the physical quantities of the goods a different relation has developed. 10% million bushels of wheat now exchange for 15 million yards of linen; the terms of trade are 10% for 15, or 10 for (nearly) 14%. Under the previous supposition the United States got 11% linen for every 10 bushels of wheat; now she gets 14% linen for every 10 bushels. Continuing the analysis, we may examine what would be com- modity wages (“real” wages) in the two countries. If, as before, the purchasers in both spent one-half of their incomes on each commodity, we should have: [ one-half spent on wheat @ $0.85 = 1 wheat In the U. S. wages $1.70 ” len el 060 = 1 linen 2 »” 7” wheat @ $0.85 = 1% wheat In Germany wages $0.90 ” tl a heh. 6 $0.60 = 2 linen American wages have risen in terms of linen. Before, the day’s commodity wages were 1 wheat plus 1} linen; now they are 1 wheat plus 14% linen. German wages will have fallen in terms of wheat; the day’s commodity wages, which had been £ linen plus 2 wheat, now are % linen plus {% wheat. The less advantageous terms on which the trade takes place for Germany are reflected in lower commodity incomes for the Germans; and the more advan- tageous terms for the United States are reflected in higher com- modity incomes for the Americans. t The ficures are not exact but mav be accented for purposes of illustration.

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