1、 Chapter 5 The Standard Trade Model (continue) 1一、A Standard Model of a Trading Economy (continue)2 Last time we have learned the biased economic growth, now let us to study relative supply and the terms of trade.3Relative Supply and the Terms of TradeExport-biased（出口偏向） growth(Figure 5-7: a) Suppos

2、e that home experiences growth biased toward cloth and disproportionately expands a countrys PP in the direction of the good it exports, Then for the world as a whole the output of cloth relative to food will rise at any given price and the world relative supply curve will shift to the right from RS

3、1 to RS24Figure 5-7: Growth and Relative SupplyRelative priceof cloth, PC/PFRelative quantityof cloth, QC + Q*C QF + Q*FRS1RD1(PC/PF)1RS2(PC/PF)22(a) Cloth-biased growth5 This shift worsens a growing countrys terms of trade, to the benefit of the rest of the world.6Import-biased growth （進口偏向）(Figure

4、5-7:b) It disproportionately expands a countrys PP in the direction of the good it imports. It improves a growing countrys terms of trade at the rest of the words expense.7Figure 5-7: Growth and Relative SupplyRelative priceof cloth, PC/PFRelative quantityof cloth, QC + Q*C QF + Q*FRS2RD2(PC/PF)2RS1

5、(PC/PF)11(b) Food-biased growth8International Effects of GrowthExport-biased growth in the rest of the world improves our terms of trade, while import-biased growth abroad worsens our terms of trade.9Export-biased growth in our country worsens our terms of trade, reducing the direct benefits of grow

6、th, while import-biased growth leads to an improvement of our terms of trade.10Immiserizing growth （貧困化的經濟增長） A situation where export-biased growth by poor nations can worsen their terms of trade so much that they would be worse off than if they had not grown at all. The change in the terms of trad

7、e is large enough to offset the initial favorable effects of an increase in a country productive capacity.11 It can occur under extreme conditions: Strongly export-biased growth must be combined with very steep RS and RD curves. Please draw the Figure and then you can fully understand it.12 It is re

8、garded by most economists as more a theoretical point than a real-world issue.13Table 5-1: Average Annual Percent Changes in Terms of Trade14 Case studyImmiserizing growth and the income In the developing countries. 15 據聯合國國際貿易和發展統計手冊的有關資料，兩類產品價格指數變化如下表。年份 1950年 1960年 1970年 1971年 A 100 100 91 122 B

9、96 144 102 153A :原料和初級產品價格B :工業制成品價格16 60年代，坦桑尼亞用5噸劍麻可以換回一臺拖拉機，70年代要用10噸劍麻才能換回同樣一臺拖拉機。 進入80年代，據聯合國最不發達國家會議的材料說：“這10年間，國際市場上工業制成品價格以每年411的速度上升，而原料和初級產品價格卻大幅度下跌，如棉花、咖啡、可可和水稻，價格分別下跌3351。”17 世界銀行資料編制了一張初級產品(不包括石油)的“商品價格加權指數”圖表，以19791981年價格為100，各年指數如下： 1960年115 1970年112 1980年100 1985年 80 1986年 7018In a s

10、tandard model of a trading economy, wediscussed the terms of trade changes from thesupply side of the world economy, now we turn to changes from the demand side of theworld economy. 19二、International Transfers of Income: Shifting the RD CurveInternational transfers of income may affect a countrys te

11、rms of trade by shifting the world relative demand curve. Relative world demand for goods may shift because of: Changes in tastes(cholesterol); Changes in technology(lamps); International transfers of income.20 How international transfers affect the terms of trade?21The transfer of problem If Home m

12、akes a transfer of some of its income to Foreign：When both countries allocate their change in spending in the same proportions (Ohlins point, P95): The RD curve will not shift, and there will be no terms of trade effect.22When the two countries do not allocate their change in spending in the same pr

13、oportions (Keyness point, P95): The RD curve will shift and there will be a terms of trade effect. 23 Which one is correct?24Effects of a transfer on the terms of trade The direction of the effect on terms of trade will depend on the difference in Home and Foreign spending patterns. Suppose that Hom

14、e has a higher marginal propensity to spend on cloth than Foreign.25 Figure 5-8 shows: Homes transfer payment to Foreign reduces demand for cloth and increases demand for food;RD curve shifts to the left, lowers the relative price of cloth;Worsening Homes terms of Trade( because it exports cloth ),

15、while improving Foreigns. 26Figure 5-8: Effects of a Transfer on the Terms of TradeRelative priceof cloth, PC/PFRelative quantityof cloth, QC + Q*C QF + Q*FRSRD2RD1(PC/PF)221(PC/PF)127Presumptions about the Terms of Trade Effects of Transfers A transfer will worsen the donors terms of trade if the d

16、onor has a higher marginal propensity to spend（邊際消費傾向） on its export good than the recipient.28 There are some questions about the Presumptions above: If differences in marginal propensities to spend were simply a matter of differences in tastes, there would be no presumption either way: Which good

17、a country exports depends for the most part on differences in technology or resources, which need have nothing to do with tastes. 29 In practice, most countries spend a much higher share of their income on domestically produced goods than foreigners do. This is not necessarily due to differences in

18、taste but rather to barriers to trade, that is natural (nontraded good such as haircuts; transport cost) and artificial (tariff and quotas).30 三、Tariffs（關稅）and Export Subsidies （出口補貼） : Simultaneous Shifts in RS and RD In previous sections we considered the relative supply and relative demand with s

19、ome economic factors, now let us deal with simultaneous shift in RS and RD. The price changes caused by tariffs and subsidies change both relative supply and relative demand.31Import tariffs and export subsidies Import tariffs are taxes levied on imports; Export subsidies are payments given to domes

20、tic producers who sell a good abroad. 32 Case studyImport tariffs and export subsidies in China. 33 我國的進口關稅 經國務院批準，從2005年1月1日起，我國將進一步降低進口關稅，關稅總水平將由10.4降低至9.9，涉及降稅的共900多個稅目。 據了解，2005年農產品平均稅率將由15.6降低到15.3；工業品平均稅率將由9.5降低到9.0。其中，水產品平均稅率為10.5，木材、紙及其制品為4.6，紡織品和服裝為11.4，化工產品為6.9，交通工具為13.3，機械產品為8.0，電子產品為9.1

21、，進口汽車為(年月日再降到，年月日降到的目標稅率)。 34 35我國的出口補貼 在計劃經濟下，國家壟斷全部外貿，國營外貿公司只要能夠完成出口計劃，全部虧損由國家財政補貼。1990年為與國際慣例接軌，取消了財政出口補貼。 我國小農業的生產成本較高，許多農產品國內價格已高于國際價格，例如在1995年時，二者之比為：大米166%，玉米138%，小麥116%。到2005年時，我國的小農經濟不會有重大改變，屆時無出口補貼，農產品如何出口？農民賣糧難，收入下降的局面很可能發生。 2005年4月有關媒體已披露我國玉米出口補貼政策，出口玉米一噸至少能補203元。36 The distinctive featu

22、re of tariffs and export subsidies is that they create a difference between prices at which goods are traded on the world market and their prices within a country.37 The direct effect of a tariff is to make imported goods more expensive inside a country than they are outside. An export subsidy raise

23、s the price of exported goods inside a country than they are outside. 38Import tariffs and export subsidies affect both relative supply and relative demand.Relative demand and supply effects of a tariffTariffs drive a wedge(楔子) between the prices at which goods are traded internationally and the pri

24、ces at which they are traded within a country .39 If home imposes a 20 percent tariff on the value of food imports: The home producers will face a lower relative cloth price and will produce less cloth and more food. The home consumers will shift their consumption toward cloth and away from food. 40

25、 So an import tariff on food imposed by Home both reduces the relative supply of cloth from RS1 to RS2 and increases the relative demand of cloth from RD1 to RD2 in Figure 5-9. As a result, the relative price of cloth must rises from PC/PF1 to PC/PF2, and Homes terms of trade improve at Foreigns exp

26、ense41Figure 5-9: Effects of a Tariff on the Terms of TradeRelative priceof cloth, PC/PFRelative quantityof cloth, QC + Q*C QF + Q*FRS1RD1RD2RS2 (PC/PF)11(PC/PF)2242 The extent of this terms of trade effect depends on how large the country imposing the tariff is relative to the rest of the world. If

27、 the country is only a small part of the world, it cannot have much effect on world relative supply and demand and therefore cannot have much effect on relative prices.43Effects of an Export Subsidy Tariffs and export subsidies are often treated as similar policies but they have opposite effects on

28、the terms of trade. 44 Suppose that Home offers 20% subsidy on the value of cloth exported. This will raise Homes internal price of cloth relative to food by 20% It leads Home producers to produce more cloth and less food; While leading home consumers to substitute food for cloth as illustrated in F

29、igure 5-6.45Figure 5-10: Effects of a Subsidy on the Terms of TradeRelative priceof cloth, PC/PFRelative quantityof cloth, QC + Q*C QF + Q*FRS1RD1RD2RS2(PC/PF)11(PC/PF)2246 Conclusion: A Home export subsidy worsens Homes terms of trade and improves Foreigns.47Implications of Terms of Trade Effects:

30、Who Gains and Who Loses?The International Distribution of Income If Home (a large country) imposes a tariff, its welfare increases as long as the tariff is not too large (in case there is no import), while Foreigns welfare decreases. If Home offers an export subsidy, its welfare deteriorates, while

31、Foreigns welfare increases.48 In the real world of many countries, a foreign government may subsidize the export of a good that competes with U.S. exports; this foreign subsidy will obviously hurt the the U.S. exports. 49 We need to qualify our conclusions from a two-country analysis: Subsidies to exports of things the U.S. imports help us, while tariffs against U.S. exports hurts us. 50 However, a tariff also imposes costs by distorting production and consumption incentives within Homes economy( see chapter 8 )51The Distribution of In