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International Trade Theory
International trade theory is a sub-field of economics which analyzes the patterns of international trade, its origins, and its welfare implications. International trade policy has been highly controversial since the 18th century. International trade theory and economics itself have developed as means to evaluate the effects of trade policies. Adam Smith's model Adam Smith describes trade taking place as a result of countries having absolute advantage in production of particular goods, relative to each other. Within Adam Smith's framework, absolute advantage refers to the instance where one country can produce a unit of a good with less labor than another country. In Book IV of his major work ''the Wealth of Nations'', Adam Smith, discussing gains from trade, provides a literary model for absolute advantage based upon the example of growing grapes from Scotland. He makes the argument that while it is possible to grow grapes and produce wine in Scotland, the investment in the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Economics
Economics () is the social science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interactions of Agent (economics), economic agents and how economy, economies work. Microeconomics analyzes what's viewed as basic elements in the economy, including individual agents and market (economics), markets, their interactions, and the outcomes of interactions. Individual agents may include, for example, households, firms, buyers, and sellers. Macroeconomics analyzes the economy as a system where production, consumption, saving, and investment interact, and factors affecting it: employment of the resources of labour, capital, and land, currency inflation, economic growth, and public policies that have impact on glossary of economics, these elements. Other broad distinctions within economics include those between positive economics, desc ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Eli Heckscher
Eli Filip Heckscher (24 November 1879 – 23 December 1952) was a Swedish political economist and economic historian. Biography Heckscher was born in Stockholm, son of the Jewish Danish-born businessman Isidor Heckscher and his spouse Rosa Meyer, and completed his secondary education there in 1896. He conducted higher studies at Uppsala University (from 1897) and Gothenburg University College (in 1898), completing his PhD in Uppsala in 1907. He was professor of Political economy and Statistics at the Stockholm School of Economics from 1909 until 1919, when he exchanged that chair for a research professorship in economic history, finally retiring as emeritus professor in 1945. In 1929 Heckscher founded the Institute for Economic and Business History Research as a key step in his effort to create the field of economic history in Sweden, and make it a policy-oriented science. He advanced his agenda by recruiting two other scholars, historian Bertil Boëthius (1885–1974) and economis ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
New Trade Theory
New trade theory (NTT) is a collection of economic models in international trade theory which focuses on the role of increasing returns to scale and network effects, which were originally developed in the late 1970s and early 1980s. The main motivation for the development of NTT was that, contrary to what traditional trade models (or "old trade theory") would suggest, the majority of the world trade takes place between countries that are similar in terms of development, structure, and factor endowments. Traditional trade models relied on productivity differences (Ricardian model of comparative advantage) or factor endowment differences (Heckscher–Ohlin model) to explain international trade. New trade theorists relaxed the assumption of constant returns to scale, and showed that increasing returns can drive trade flows between similar countries, without differences in productivity or factor endowments. With increasing returns to scale, countries that are identical still have an ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Home-market Effect
The home market effect is a hypothesized concentration of certain industries in large markets. The home market effect became part of New Trade Theory. Through trade theory, the home market effect is derived from models with returns to scale and transportation costs. When it is cheaper for an industry to operate in a single country because of returns to scale, an industry will base itself in the country where most of its products are consumed in order to minimize transportation costs. The home market effect implies a link between market size and exports that is not accounted for in trade models based solely on comparative advantage. The home market effect first proposed by Corden and was developed by Paul Krugman in a 1980 article. Krugman sought to provide an alternative to the Linder hypothesis. Based on recent research, the home market effect confirms Linder's sentiment that a nation's demand is a predicate for its exports, but does not support Linder's claim that differences i ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Returns To Scale
In economics, returns to scale describe what happens to long-run returns as the scale of production increases, when all input levels including physical capital usage are variable (able to be set by the firm). The concept of returns to scale arises in the context of a firm's production function. It explains the long-run linkage of the rate of increase in output (production) relative to associated increases in the inputs (factors of production). In the long run, all factors of production are variable and subject to change in response to a given increase in production scale. While economies of scale show the effect of an increased output level on unit costs, returns to scale focus only on the relation between input and output quantities. There are three possible types of returns to scale: increasing returns to scale, constant returns to scale, and diminishing (or decreasing) returns to scale. If output increases by the same proportional change as all inputs change then there are cons ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Monopolistic Competition
Monopolistic competition is a type of imperfect competition such that there are many producers competing against each other, but selling products that are differentiated from one another (e.g. by branding or quality) and hence are not perfect substitutes. In monopolistic competition, a company takes the prices charged by its rivals as given and ignores the impact of its own prices on the prices of other companies. If this happens in the presence of a coercive government, monopolistic competition will fall into government-granted monopoly. Unlike perfect competition, the company maintains spare capacity. Models of monopolistic competition are often used to model industries. Textbook examples of industries with market structures similar to monopolistic competition include restaurants, cereals, clothing, shoes, and service industries in large cities. The "founding father" of the theory of monopolistic competition is Edward Hastings Chamberlin, who wrote a pioneering book on the ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Foreign Direct Investment
A foreign direct investment (FDI) is an investment in the form of a controlling ownership in a business in one country by an entity based in another country. It is thus distinguished from a foreign portfolio investment by a notion of direct control. The origin of the investment does not impact the definition, as an FDI: the investment may be made either "inorganically" by buying a company in the target country or "organically" by expanding the operations of an existing business in that country. Definitions Broadly, foreign direct investment includes "mergers and acquisitions, building new facilities, reinvesting profits earned from overseas operations, and intra company loans". In a narrow sense, foreign direct investment refers just to building new facility, and a lasting management interest (10 percent or more of voting stock) in an enterprise operating in an economy other than that of the investor. FDI is the sum of equity capital, long-term capital, and short-term capital ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Wassily Leontief
Wassily Wassilyevich Leontief (russian: Васи́лий Васи́льевич Лео́нтьев; August 5, 1905 – February 5, 1999), was a Soviet-American economist known for his research on input–output analysis and how changes in one economic sector may affect other sectors. Leontief won the Nobel Memorial Prize in Economic Sciences in 1973, and four of his doctoral students have also been awarded the prize (Paul Samuelson 1970, Robert Solow 1987, Vernon L. Smith 2002, Thomas Schelling 2005). Biography Early life Wassily Leontief was born on August 5, 1905, in Munich, Germany, the son of Wassily W. Leontief (professor of Economics) and Zlata (German spelling ''Slata''; later Evgenia) Leontief (née Becker). Wassily Leontief Sr. belonged to a family of Russian old-believer merchants living in St. Petersburg since 1741. Evgenia (Genya) Becker belonged to a wealthy Jewish family from Odessa. At 15 in 1921, Wassily Jr. entered University of Leningrad in present-day St. P ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Taste (sociology)
In sociology, taste or palate is an individual or a demographic group's subjective preferences of dietary, design, cultural and/or aesthetic patterns. Taste manifests socially via distinctions in consumer choices such as delicacies/beverages, fashions, music, etiquettes, goods, styles of artwork, and other related cultural activities. The social inquiry of taste is about the arbitrary human ability to judge what is considered beautiful, good, proper and valuable. Social and cultural phenomena concerning taste are closely associated to social relations and dynamics between people. The concept of social taste is therefore rarely separated from its accompanying sociological concepts. An understanding of taste as something that is expressed in actions between people helps to perceive many social phenomena that would otherwise be inconceivable. Aesthetic preferences and attendance to various cultural events are associated with education and social origin. Different socioeconom ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Factor Prices
In economic theory, a factor price is the unit cost of using a factor of production, such as labor or physical capital. There has been much debate as to what determines factor prices. Classical and Marxist economists argue that factor prices decided the value of a product and therefore the value is intrinsic within the product. For this reason, the term natural price is often used instead. Marginalist economists argue that the factor price is a function of the demand for the final product, and so they are imputed from the finished product. The theory of imputation was first expounded by the Austrian economist Friedrich von Wieser Friedrich Freiherr von Wieser (; 10 July 1851 – 22 July 1926) was an early (so-called "first generation") economist of the Austrian School of economics. Born in Vienna, the son of Privy Councillor Leopold von Wieser, a high official in the war m .... Production economics Factors of production {{Econ-stub ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
Good (economics)
In economics, goods are items that satisfy human wants and provide utility, for example, to a consumer making a purchase of a satisfying Product (business), product. A common distinction is made between goods which are transferable, and Service (economics), services, which are not transferable. A good is an "economic good" if it is useful to people but scarcity, scarce in relation to its demand so that human effort is required to obtain it.Samuelson, P. Anthony., Samuelson, W. (1980). Economics. 11th ed. / New York: McGraw-Hill. In contrast, free goods, such as air, are naturally in abundant supply and need no conscious effort to obtain them. Private goods are things owned by people, such as Television, televisions, living room furniture, wallets, cellular telephones, almost anything owned or used on a daily basis that is not food-related. A consumer good or "final good" is any item that is ultimately consumed, rather than used in the production of another good. For example, ... [...More Info...] [...Related Items...] OR: [Wikipedia] [Google] [Baidu] |
