关于贸易的东西.doc

Chapter 2Basic Theory of International TradeCountries have different natural, human, and capital resources and different ways of combining these resources, they are not equally efficient at producing the goods and services that their residents demand. The decision to produce any goods or service has an opportunity cost, which is the amount of another goods or service that might otherwise have been produced. Given a choice of producing one goods or another, it is more efficient to produce the good with the lower opportunity cost, using the increased production of that goods to trade for the goods with the higher opportunity cost.When a country can produce more of certain goods with the same resources that another country can, it is said to have an absolute advantage in the production of that goods. If the second country producing the goods that the first country wants, both will be better off if they specialize and trade.But trade is usually beneficial to both countries even if one has an absolute advantage in the production of both goods that are to be traded. Given any two products, a nation has a comparative advantage in the product with the lower opportunity cost. The terms of trade must be such that both countries lower the opportunity costs of the goods they are getting from the trade.2.1 International SpecializationIn his original state man was self-sufficient, providing food, shelter and clothing, simple though it was, for his family. It did not take long, however, for him to understand that there were some things he was more capable of doing than others and that it would benefit him to concentrate his efforts on the production of those goods in which he was particularly proficient and to leave others to produce the goods that called for skills which he did not possess. This was the beginning of specialization. Similarly, those who lived close to sources of fuel or raw material were able to specialize in the production of basic commodities that could not be so easily manufactured elsewhere. The location of the majority of industries today can be traced back to the availability of fuel and power, raw materials and particular skills, but with the advent of new fuels that are available nationwide and of cheap and efficient means of transportation, these original factors are not as important as they were.Specialization on an international basis is also worthwhile. If countries specialize in the production of those goods in which they have either a relative or absolute advantage, everyone stands to gain. This is in fact the crux（要点）of the Law of Comparative Costs which states they by specializing in the output of those goods in the production of which they have the comparative advantage, countries can increase the total output of goods.2.2 General Concept of Absolute Advantage and Comparative AdvantageAbsolute advantage and comparative advantage are two theories of international specialization. For classical economists, the value of goods is determined by the cost of production, with the relative cost of production of various goods revealed by the labor content. For instance, suppose that goods A has a labor content of 2 hours, but goods B requires 10 hours of labor for its production. The classical economists thought that goods B would be 5 times as valuable as goods A. In other words, goods B costs 5 times as much as goods A. This theory is known as the labor theory of value. Comparative advantage means that countries prosper by concentrating on what they can produce best. That is, each nation produces and trades the goods which it can manufacture cheaply and imports the commodity which it can produce only at great sacrifice. Thus the more labor required to produce a piece of goods, the more expensive it is. A nation would export a commodity which it can produce with relatively little labor and imports the commodity which, if produced at home, would require relatively large amounts of labor. A given commodity cannot be produced with the same amount of labor in all countries. Favorable sources allow a nation to produce a piece of goods with less labor than a nation not as favorably situated. For example, a nation with coal resources near the surface will need to devote smaller amounts of labor per ton than a nation with coal resources at great depths.According to Adam Smith, trade between two nations is based on absolute advantage. When one nation is more efficient than another in the production of one commodity but is less efficient than (or has an absolute disadvantage with respect to) the other nation in producing a second commodity, then both nations can gain by each specializing in production of the commodity of its absolute advantage and exchanging part of its output with the other nation for the commodity of its absolute disadvantage. By this process, resources are utilized in the most efficient way and the output of both commodities will rise. The increase in the output of both commodities measures the gains from specialization in production available to be divided between the two nations through trade.For example, because of climatic conditions, Canada is efficient in growing wheat but inefficient in growing bananas (hot houses would have to be used). On the other hand, Nicaragua is efficient in growing bananas but inefficient in growing wheat. Thus, Canada has an absolute advantage over Nicaragua in the cultivation of wheat but an absolute disadvantage in the cultivation of bananas. The opposite is true for Nicaragua.In this respect, a nation behaves no differently from an individual who does not attempt to produce all the commodity which he can produce most efficiently and then exchanges part of his output for the other commodities he needs or wants. This way, total output and the welfare of all individuals is maximized.The Theory of Absolute AdvantageThe theory of absolute advantage holds a commodity will be produced in the country where it costs least in terms of resources (capital, land, and labor). This theory is illustrated in the following table. To be more illustrative, let us assume there are only tow countries producing tow commodities under perfect competition:Output per man-year of laborCountry A Country B Wheat 50 10 Cotton 40 20From the above table, we can see that a man in Country A can produce 50 units of wheat in a year but only 10 in Country B. On the other hand, one man in Country B can produce 40 units of cotton in a year but only 20 in Country A. So Country A is more efficient in producing wheat than Country B, and we say the former has an absolute advantage over the latter. Similarly, Country B is more efficient with cotton and has an absolute advantage over Country A. as a result, Country A would specialize in the production of wheat and trade some of them for Country Bs cotton, and Country B would specialize in cotton and exchange some of them for Country As wheat. Both countries will gain benefits through specialization and trade.l Adam Smith wrote in The Wealth of NationsIf a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it of them with some part of the produce of our own industry, employed in a way in which we have some advantage. (Book IV, Section ii, 12) l The idea here is simple and intuitiveIf our country can produce some set of goods at lower cost than a foreign country, and if the foreign country can produce some other set of goods at a lower cost than we can produce them, then clearly it would be best for us to trade our relatively cheaper goods for their relatively cheaper goods. In this way both countries may gain from trade.The Theory of Comparative AdvantageDavid Ricardos Numerical ExampleBecause the idea of comparative advantage is not immediately intuitive, the best way of presenting it seems to be with an explicit numerical example as provided by David Ricardo. In his example Ricardo imagined two countries, England and Portugal, producing two goods, cloth and wine, using labor as the sole input in production. He assumed that the productivity of labor (i.e., the quantity of output produced per worker) varied between industries and across countries. However, instead of assuming, as Adam Smith did, that England is more productive in producing one good and Portugal is more productive in the other; Ricardo assumed that Portugal was more productive in both goods. Based on Smiths intuition, then, it would seem that trade could not be advantageous, at least for England. However, Ricardo demonstrated numerically that if England specialized in producing one of the two goods, and if Portugal produced the other, then total world output of both goods could rise! If an appropriate terms of trade (i.e., amount of one good traded for another) were then chosen, both countries could end up with more of both goods after specialization and free trade then they each had before trade. This means that England may nevertheless benefit from free trade even though it is assumed to be technologically inferior to Portugal in the production of everything.As it turned out, specialization in any good would not suffice to guarantee the improvement in world output. Only one of the goods would work. Ricardo showed that the specialization good in each country should be that good in which the country had a comparative advantage in production. To identify a countrys comparative advantage good requires a comparison of production costs across countries. However, one does not compare the monetary costs of production or even the resource costs (labor needed per unit of output) of production. Instead one must compare the opportunity costs of producing goods across countries. Another way to define comparative advantage is by comparing productivities across industries and countries. Thus suppose that Portugal is more productive than England in the production of both cloth and wine. If Portugal is twice as productive in cloth production relative to England but three times as productive in wine, then Portugals comparative advantage is in wine, the good in which its productivity advantage is greatest. Similarly, Englands comparative advantage good is cloth, the good in which its productivity disadvantage is least. This implies that to benefit from specialization and free trade, Portugal should specialize and trade the good in which it is most best at producing, while England should specialize and trade the good in which it is least worse at producing. l A Gardening Story Suppose it is early spring and it is time to prepare the family backyard garden for the first planting of the year. The father in the household sets aside one Sunday afternoon to do the job but hopes to complete the job as quickly as possible. Preparation of the garden requires the following tasks. First, the soil must be turned over and broken up, then the soil must be raked and smoothed. Finally, seeds must be planted or sowed. This year the fathers seven-year-old son is anxious to help. The question at hand is whether the son should be allowed to help if ones only objective is to complete the task in the shortest amount of time possible. At first thought, the father is reluctant to accept help. Clearly each task would take the father less time to complete than the time it would take the son. In other words, the father can perform each task more efficiently than the seven-year-old son. The father estimates that it will take him three hours to prepare the garden if he works alone, as shown in the following table. TaskCompletion Time (hours)Tilling1.0Raking1.0Planting1.0Total3.0On second thought, the father decides to let his son help according to the following procedure. First the father begins the tilling. Once he has completed half of the garden, the son begins raking the tilled section while the father finishes tilling the rest of the garden plot. After the father finishes tilling he begins planting seeds in the section the son has already raked. Suppose the son rakes slower than the father plants, and that the father completes the sowing process just as the son finishes raking. Note this implies that raking takes the son almost 2 hours compared to one hour for the father. However, because the sons work is done simultaneously with the fathers work, it does not add to the total time for the project. Under this plan the time needed to complete the tasks in shown in the following table. TaskCompletion Time (hours)Tilling1.0Raking & Planting1.0Total2.0Notice that the total time needed to prepare the garden has fallen from 3 hours to 2 hours. The garden is prepared in less time with the sons help than it could have been done independently by the father. In other words, it makes sense to employ the son in (garden) production even though the son is less efficient than the dad in every one of the three required tasks. Overall efficiency is enhanced when both resources (the father and son) are fully employed. This arrangement also clearly benefits both the father and son. The father completes the task in less time and thus winds up with some additional leisure time which the father and son can enjoy together. The son also benefits because he has contributed his skills to a productive activity and will enjoy a sense of accomplishment. Thus both parties benefit from the arrangement. However, it is important to allocate the tasks correctly between the father and the son. Suppose the father allowed his son to do the tilling instead. In this case the time needed for each task might look as follows. TaskCompletion Time (hours)Tilling4.0Raking1.0Planting1.0Total6.0The time needed for tilling has now jumped to 4 hours because we have included the time spent traveling to and from the hospital and the time spent in the emergency room! Once the father and son return, the father must complete the remaining tasks on his own. Overall efficiency declines in this case compared to the father acting alone. This highlights the importance of specializing in production of the task in which you have a comparative advantage. Even though the father can complete all three tasks quicker than his son, his relative advantage in tilling greatly exceeds his advantage in raking and planting. One might say that the father is most-best at tilling while he is least-best at raking and planting. On the other hand, the son is least-worse at raking and planting but most-worse at tilling. Finally, because of the sequential nature of the tasks, the son can remain fully employed only if he works on the middle task, namely raking. l Interpreting the Theory of Comparative Advantage The garden story o