Transcript specific factors model

International Economics
讲授人： 刘志忠
电子邮箱: [email protected]
TEST 1(20120912)
1、Suppose there are 100 workers in Home. There are
200 workers in Foreign. There are no obstacles to labor
movement between the two countries. The marginal
product of labor of Home takes the following form:
MPL1=300－2QL;while The marginal product of labor of
Foreign takes the following form: MPL2=900－3QL′. QL
is the number of workers employed in Home. QL′is the
number of workers employed in Foreign.
Determine the effects of international labor mobility on
the following:
• (1) the real wages in each country before and after labor
movement; (2) the quantity of labor movement;。
• 2、写下你感兴趣的国际经济问题
•
•
•
•
•
•
•
教材：Paul Krugman and Maurice Obstfeld
International economics: Theory and Policy(第五
版)。网上有第九版。
教学课时：48，单周两节、双周四节
教学内容及考试内容：课堂讲授1-6章，13-16章，
自学7-9章，共十三章。平均四节课讲一章。
教学语言：中文教学、英文教材、英文PPT
学习方式：老师只是教练，督促和检查大家学习。
每周都有测试，测试题型提前告知。第二、三、四、
七、八、九章后面的计算题是必考题型，其他题目
提前告知。时刻准备着！！
分数占比方案：（1）平时25%、期中考试15%、期
末60%
十周课堂测试，每一次两分，共20分，另外五分是
到课及课堂表现。
Chapter 1
Introduction
What is International Economics About?
• The Gains from Trade
• The Pattern of Trade (who sells what to whom?)
• How Much Trade?
•
•
•
•
The Balance of Payments
Exchange Rate Determination
International Policy Coordination
The International Capital Market
International Economics: Trade and Money
• International trade issues
– Part I: International Trade Theory
– Part II: International Trade Policy
• International monetary issues
– Part III: Exchange Rates and Open-Economy
Macroeconomics
– Part IV: International Macroeconomic Policy
CONTENTS
•
Introduction（4）
•
Labor Productivity and Comparative Advantage: The Ricardian
Model （4）
•
Specific Factors and Income Distribution （5）
•
Resources and Trade: The Heckscher- Ohlin Model （6）
•
The Standard Trade Model （7）
•
Economies of Scale, Imperfect Competition, and International
Trade （8）
CONTENTS
•
International Factor Movements（自学）
•
The Instruments of Trade Policy（自学）
•
Exchange Rates and the Foreign Exchange Market: An Asset
Approach（9）
• Money, Interest Rates, and Exchange Rates（9）
• Price Levels and the Exchange Rate in the Long Run（10）
• Output and the Exchange Rate in the Short Run（11）
请自学第七章并做本题
Suppose there are 100 workers in Home. There are
200 workers in Foreign. There are no obstacles to labor
movement between the two countries. The marginal
product of labor of Home takes the following form:
MPL1=300－2QL;while The marginal product of labor of
Foreign takes the following form: MPL2=900－3QL′. QL
is the number of workers employed in Home. QL′is the
number of workers employed in Foreign.
Determine and graph the effects of international labor
mobility on the following:
• (1) the real wages in each country before and after labor
movement; (2) the quantity of labor movement;
•
(3) the quantity of the total output increased.
Homework
• In the Specific Factors Model, suppose
there are 1000 workers. MPLM=250－0.2LM;
MPLF=350－0.3LF. PM=PF=1.
• Determine the Labor used in manufactures
and the income of capital owners.
• Determine the Labor used in food and the
income of landowners.
• What is the equilibrium relative price of
manufactures?
Homework
• In the Specific Factors Model, suppose
there are 1000 workers. MPLM=250－
0.2LM; MPLF=350－0.3LF. PM=2,PF=1.
• Determine the Labor used in
manufactures and the income of capital
owners.
• Determine the Labor used in food and the
income of landowners.
• What is the equilibrium relative price of
manufactures?
CHAPTER 3
The Specific-Factors
Model
湖南大学经济与贸易学院
刘志忠
Chapter Organization
• Introduction
• The Specific Factors Model
• International Trade in the Specific
Factors Model
• Income Distribution and the Gains
from Trade
• Summary
湖南大学经济与贸易学院
刘志忠
Introduction
• Trade has substantial effects on income
distribution within each trading nation
for two main reasons .
– Resources cannot move immediately or
costlessly from one industry to another.
– Industries differ in the factors of
production they demand.
• The specific factors model allows trade
to affect income distribution.
湖南大学经济与贸易学院
刘志忠
The Specific Factors
Model
– Assumptions of the Specific Factors Model
• One economy can produce two goods, manufactures and
food
• There are three factors of production; labor (L), capital
(K) and land (T for terrain)
• Manufactures produced using capital and labor (but not
land)
• Food produced using land and labor (but not capital)
– Labor is a mobile factor that can be used in either sector
– Land and capital are specific factors that can be used only
in the production of one good
• Perfect competition prevails in all markets
湖南大学经济与贸易学院
刘志忠
The Specific Factors
Model
– The production function for manufactures is given
by
QM = QM (K, LM)
– The production function for food is given by
QF = QF (T, LF)
– The full employment of labor condition requires
that the economy-wide supply of labor must equal
the labor employed in food and manufactures:
LM + LF = L
– We can use these equations and derive the
production
possibilities frontier 刘
of 志
the忠economy
湖南大学经济与贸易学院
Figure3-3: The Production Possibility Frontier in the SF model
QF
QF = QF (T, LF)
1'
2'
QF 2
LF
3'
LF 2
L
QM 2
1
LM 2
2
3
LM
L
QM = QM (K, LM)
QM
• In the Specific Factors Model, suppose
there are 800 workers. MPLM=250－0.2LM;
MPLF=350－0.3LF. PM=PF=1.
• Determine the Labor used in manufactures
and the income of capital owners.
• Determine the Labor used in food and the
income of landowners.
• What is the equilibrium relative price of
manufactures?
湖南大学经济与贸易学院
刘志忠
• In the Specific Factors Model, suppose
there are 800 workers. MPLM=250－
0.2LM; MPLF=350－0.3LF. PM=2,PF=1.
• Determine the Labor used in
manufactures and the income of capital
owners.
• Determine the Labor used in food and
the income of landowners.
• What is the equilibrium relative price
of manufactures?
湖南大学经济与贸易学院
刘志忠
The Specific Factors
Model
Figure3-4: The Allocation of Labor
Wage rate, W
Wage rate, W
1
PF X MPLF
(Demand curve
for labor in food)
W1
PM X MPLM
(Demand curve for labor in
manufacturing)
Labor used in
manufactures, LM
L1M
Labor used
in food, LF
L1F
Total labor supply, L
The Specific Factors
Model
Figure 4: Production
in the Specific Factors Model
Output of food, QF
Slope = -(PM /PF)1
1
Q1 F
PP
Q1 M
Output of manufactures, QM
The Specific Factors
Model
Figure 6: A Rise
in the Price of Manufactures
Wage rate, W
7%
upward
shift in
labor
demand
Wage
W2
rate
rises by W 1
less than
7%
1
PF X MPLF
Wage rate, W
2
1
PM 2 X MPLM
PM 1 X MPLM
Labor used in
manufactures, LM
Amount of labor
shifted from food
to manufactures
Labor used
in food, LF
The Specific Factors
Model
Figure 7: The Response of Output to a Change in the
Output of food, QF
Relative Price of Manufactures
Slope = - (PM /PF)1
Q1F
1
Q2F
2
Slope = - (PM /PF) 2
PP
Q1 M
Q2 M
Output of
manufactures, QM
The Specific Factors
Model of Relative Prices
Figure 8: Determination
Relative price
of manufactures, PM /PF
RS
1
(PM /PF
)1
RD
(QM /QF )1
Relative quantity
of manufactures, QM/QF
The Specific Factors
Model
• Relative Prices and the Distribution of
Income
– Suppose that PM increases by 10%. Then,
we would expect the wage to rise by less
than 10%, say by 5%
– What is the economic effect of this
price increase on the incomes of the
following three groups?
• Workers
• Owners of capital
International Trade in the SF Model
• Assume that two countries (Japan and
US) have the same relative demand curve.
• Therefore, the only source of
international trade is the differences in
relative supply. The relative supply might
differ because the countries could differ
in:
– Technology
– Factors of production (capital, land, labor)
湖南大学经济与贸易学院
刘志忠
International Trade in the SF Model
• Trade and Relative Prices
– Suppose that Japan has more capital per worker
than US, while US has more land per worker than
Japan
– As a result, the pretrade relative price of
manufactures in Japan is lower than the pretrade
relative price in US
– International trade leads to a convergence of
relative prices
湖南大学经济与贸易学院 刘 志 忠
International Trade in the SF Model
Figure 9: Changing the Capital Stock
Wage rate, W
Increase
in capital
stock, K
PF 1 X MPLF
Wage rate, W
2
W2
1
W1
PM X MPLM2
PM X MPLM1
Labor used in
manufactures, LM
Amount of labor
shifted from food to
manufactures
Labor used
in food, LF
International Trade in the SF
Model
Figure 3-11: Trade and Relative Prices
Relative price
of cloth, PC/PF
RSA
RS world
RSJ
RD
Relative quality
of cloth, QC + Q*C
Q F + Q *F
Income Distribution and the Gains from Trade
• To assess the effects of trade on particular
groups, the key point is that international
trade shifts the relative price of
manufactures and food.
• Trade benefits the factor that is specific to
the export sector of each country, but hurts
the factor that is specific to the importcompeting sectors.
湖南大学经济与贸易学院
刘志忠
• Trade has ambiguous effects on mobile
Income Distribution and the Gains from
Trade
Figure 11: Trade Expands the Economy’s Consumption Possibilities
Consumption of food, DF
Output of food, QF
2
Q1
1
F
Budget constraint
(slope = - PM/PF)
PP
Q1 M
Consumption of manufactures, DM
Output of manufactures, QM
Summary
• International trade can have income distribution
effects within countries, so that it produces
losers as well as winners.
• Income distribution effects arise for two
reasons:
– Factors of production cannot move
instantaneously and costlessly from one industry
to another
– Changes in an economy’s output mix have
differential effects on the demand for different
factors of production
湖南大学经济与贸易学院
刘志忠
• The specific-factors model is a useful
Summary
• Differences in resources can cause countries
to have different relative supply curves, and
thus cause international trade
• Factors specific to export sectors in each
country gain from trade, while factors
specific to import-competing sectors lose
• Mobile factors may either gain or lose
• However, trade produces overall gains in the
sense that those who gain could in principle
compensate those who lose while still
remaining better off than before
湖南大学经济与贸易学院
刘志忠