International Economics » (3rd Edition)

This easy-to-read book emphasizes how to use basic economic theory and where to apply it to international economic issues. It empowers readers to understand the international economics they will encounter in business publications such as the Wall Street Journal, and to use international economics to make business decisions.
The first half of the book covers international trade, factor movements, and trade and economic development; the final ten chapters on international finance can be divided into at least three parts: national income accounting and exchange rate determination; purchasing power parity and the real exchange rate; and open economy macroeconomics.
A useful reference for government officials dealing with international trade and finance issues, and for private citizens who want to learn more about the effect of international economics on business in the 21st century.

Ch. 1 Introduction : an overview of the world economy 1

Ch. 2 Why countries trade 21

Ch. 3 Comparative advantage and the production possibilities frontier 41

Ch. 4 Factor endowments and the commodity composition of trade 68

Ch. 5 Intraindustry trade 93

Ch. 6 International factor movements 117

Ch. 7 Tariffs 142

Ch. 8 Nontariff distortions to trade 166

Ch. 9 International trade policy 193

Ch. 10 Regional economic arrangements 221

Ch. 11 International trade and economic growth 245

Ch. 12 National income accounting and the balance of payments 273

Ch. 13 International transactions and financial markets 298

Ch. 14 Exchange rates and their determination : a basic model 319

Ch. 15 Money, interest rates, and the exchange rate 338

Ch. 16 Price levels and the exchange rate in the long run 364

Ch. 17 Output and exchange rate in the short run 389

Ch. 18 Macroeconomic policy and floating exchange rates 418

Ch. 19 Fixed exchange rates and currency unions 447

Ch. 20 International monetary arrangements 476

Ch. 21 Capital flows and the developing countries 497

App GDP, population, and exports for countries, 2005 521

Glossary 527

Index 535