CH06 Economies of Scale,Imperfect Competition, and International Trade(国际经济学-厦门大学 陈涛)宣讲培训.pptVIP

Figure 6-5: Continued Monopolistic Competition and Trade Figure 6-5: Continued Monopolistic Competition and Trade Table 6-2: Hypothetical Example of Gains from Market Integration Monopolistic Competition and Trade Economies of Scale and Comparative Advantage Assumptions: There are two countries: Home (the capital-abundant country) and Foreign. There are two industries: manufactures (the capital-intensive industry) and food. Neither country is able to produce the full range of manufactured products by itself due to economies of scale. Monopolistic Competition and Trade Figure 6-6: Trade in a World Without Increasing Returns Home (capital abundant) Foreign (labor abundant) Manufactures Food Monopolistic Competition and Trade If manufactures is a monopolistically competitive sector, world trade consists of two parts: Intraindustry trade The exchange of manufactures for manufactures Interindustry trade The exchange of manufactures for food Monopolistic Competition and Trade Figure 6-7: Trade with Increasing Returns and Monopolistic Competition Home (capital abundant) Foreign (labor abundant) Manufactures Food Interindustry trade Intraindustry trade Monopolistic Competition and Trade Main differences between interindustry and intraindustry trade: Interindustry trade reflects comparative advantage, whereas intraindustry trade does not. The pattern of intraindustry trade itself is unpredictable, whereas that of interindustry trade is determined by underlying differences between countries. The relative importance of intraindustry and interindustry trade depends on how similar countries are. Monopolistic Competition and Trade The Significance of Intraindustry Trade About one-fourth of world trade consists of intra-industry trade. Intra-industry trade plays a particularly large role in the trade in manufactured goods among advanced industrial nations, which accounts for most of world trade. Monopolistic Competition and Trade Table 6-3: Indexes of Intraindustry T