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

COMPARATIVE COSTS Fa gl 29 These last figures, however, call for correction. They have been worked out on the supposition that, as before, one-half of the wages in each country are spent on linen, one-half on wheat. But this supposition is not consistent with what has been assumed with regard to the conditions of demand; namely, that the demand of the Germans for wheat has increased. The Germans, under that assumption no longer spend one half of their wages on wheat. They have come to spend a larger proportion of their total income on wheat. The Americans, on the other hand, have been tempted by rising prices of wheat to send more of that commodity to Ger- many, and have been led to consume less of it themselves. And they have also been tempted by falling prices of linen to buy from the Germans more of that article; they have come to spend a larger proportion of their income on linen. We need to modify our figures accordingly. Make the modification by supposing that under the changed conditions of demand % of the Americans’ income is spent on linen, % of it on wheat; and that in Germany 4 of the income is spent on linen, § on wheat. Then we have: 2 or $0.68 spent on wheat @ $0.85 = 5% wheat In the 1. S. wages $1.70 ‘1.02 ” » linen @ en 2) A linen r 80.60 ” 7 wheat @ &’ wheat In Germany wages $0.90 or 80.30 ” ” linen @ $0.60 5 linen Compare now the figures with those arrived a ton page 26, where the commodity wages were worked out under the first set of conditions, before the increase in German demand for wheat. Because of the increase in demand the nature of the changes in commodity wages is as follows: In the U. S. commodity wages were [n Germany commodity wages were BEFORE wheat linen wheat men AFTER 3. wheat ' linen wheat — linen Can it be held, under this revised (and consistent) statement, that commodity wages in the United States have unquestionably risen, those in Germany unquestionably fallen? True, the Amer-

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