If a country has higher labor productivity than other countries in a certain product, it will have an absolute advantage in this product; on the contrary, a product with low labor productivity will not have an absolute advantage, that is, it will have an absolute disadvantage.

1. Division of labor can improve labor productivity

2. Each country will have an absolute advantage in the production of a certain commodity due to different innate or acquired conditions.

3. International trade is based on absolute advantage

4. Advocate the implementation of free trade policy.

The labor productivity of one country in all commodities is lower than that of another country, that is, the production of all commodities is at an absolute disadvantage, but commodities with smaller relative disadvantages have a comparative advantage over those commodities with greater relative disadvantages.

The basis of international trade is not limited to absolute differences in labor productivity. As long as there are relative differences in labor productivity between countries, there will be relative differences in production costs and product prices, giving each country a comparative advantage in different products. , making international division of labor and international trade possible.

1. Division of labor can improve labor productivity

2. Each country will have an absolute advantage in the production of a certain commodity due to different innate or acquired conditions.

3. International trade is based on absolute advantage

4. Advocate the implementation of free trade policy.

The basis of international trade is not limited to absolute differences in labor productivity. As long as there are relative differences in labor productivity between countries, there will be relative differences in production costs and product prices, giving each country a comparative advantage in different products. , making international division of labor and international trade possible.

In the international division of labor and international trade system, each country should produce and export goods that are intensive in the country's relatively abundant factors, and import goods that are intensive in the country's relatively scarce factors.

Including the narrow sense of factor endowment theory and factor price equalization theory. This theory studies the reaction of international trade on factor prices, explaining that international trade not only equalizes international commodity prices, but also equalizes factor prices in various countries.

1. Economic growth is biased towards the export sectors of growing countries.

2. The country is a large country in the world market, that is, changes in its export supply are enough to affect world prices.

3. The country has a high marginal propensity to import, that is, its demand for imports will increase significantly due to economic growth.

4. The price elasticity of demand for the country’s export products in the world market is low.

5. The exporting country has a single economic structure and is highly dependent on exports; the development of the national economy is highly dependent on the export of this product.

Factor intensity reversal means that a given commodity (such as X) is a labor-intensive product in a labor-abundant country (such as country A), but it is a capital-intensive product in a capital-abundant country (such as country B).​

The H-O theory is based on the assumption of complete free competition, but there are a large number of tariff and non-tariff barriers in actual international trade.

The trade policy of the United States is to restrict the export of high-tech products and hinder the import of labor-intensive products. U.S. imports of labor-intensive products are subject to stricter import barriers than imports of capital-intensive products.

Human capital Physical capital and human capital intensive

No consideration of natural resources

When a country enjoys a comparative advantage in the production of a certain commodity, but its citizens have a special preference for that commodity in consumption, the original direction of imports determined by the H-O theorem will change, that is, demand will occur. reverse.

If capital-intensive goods account for the vast majority of U.S. consumers’ consumption structure, then the U.S. may export labor-intensive products and import capital-intensive products.

1-Professional supplier

2-Labor market sharing

3-Knowledge spillover

External economies of scale can be an independent cause of international trade. Since the two countries' situations are exactly the same, both countries can benefit from international trade regardless of which product they produce or export.

determining factors

1-Causes of trade: pursuit of external economies of scale

2-The structure of trade: uncertain

3- Obtaining trade benefits: Within a certain price range, participating trading countries can benefit from trade, but the distribution of benefits is uneven.

(1) There are a large number of sellers and buyers in the industry

(2) Manufacturers provide substitutes that are different but close to each other

(3) Manufacturers are free to enter or exit

(4) Internal economies of scale are the source of monopoly power

Assumptions:

First, the larger the market, the greater the number of manufacturers it can accommodate.

Secondly, as the number of manufacturers increases, differentiated products lead to an expanding range of products. At the same time, the demand lines tangent to the average cost curve of a single manufacturer become flatter, and the output of a single manufacturer increases.

Third, the average price level also continues to decline.

Market expansion will produce two positive effects: From the perspective of manufacturers:

From the perspective of overall social welfare, the benefits of trade are reflected in two aspects:

The basis of trade: the technology gap

Trade model: When there is a technology gap, the innovator country exports: When the technology gap disappears, the imitating country exports

The size of trade: changes with technology gaps

Trade benefits: Innovative countries gain innovation benefits

Advancement: This theory transitions the explanation of the causes of trade from static to dynamic

limitation:

Advancedness:

limitation:

(1) Imported and exported goods are highly substitutable for each other.

(2) There is no big difference between the importing country and the exporting country in terms of production capacity of the commodity.

(1) International trade of bulk raw materials

(2) Entrepot trade and re-export trade

(3) International trade caused by seasonal differences in products

(4) Internal trade of multinational companies

(1) Horizontal difference is the difference caused by different combinations of the same attributes of commodities.

(2) Technical differences

(3) Vertical differences: differences in output and quality.

1-Mercantilism

2-Infant industry protection theory

3-Trade Multiplier Theory (Keynes)

4-Strategic Trade Policy

Tariff definition: only for goods, no services. Different from national borders

(2) Classification of tariffs

(3) Economic effects of tariffs

(1) The meaning of non-tariff barrier measures on imports

Among the policy tools of non-tariff trade restrictions, "quantitative restrictions" that directly restrict imports have the greatest and most direct protective effect, especially for commodities with inelastic demand such as agricultural products. The effect is more significant.

(1) Import quota system

(2) Import license system

measures to encourage exports

1. Export subsidies and export tax rebates

2. Export credit and export credit state guarantee system

3. Foreign exchange dumping

4. Special Economic Zone

5. Other measures to encourage and promote exports

①Legitimate protection is limited to the learning and mastering process of industries introduced from foreign countries. After this period, the protection should be cancelled. ②Protection should only be limited to those industries that are protected, and in the near future, industries that can survive without protection. ③Industries that are initially relatively disadvantaged may become comparatively advantageous industries after a period of protection.

In addition to adhering to Mill's principle of industrial independence, the cost-benefit analysis method in economics was also introduced and applied.

The external effects of the industry during the period of protection should also be considered.

① The protected infant industries must be conducive to the utilization of potential resources; ② The protection of infant industries must be conducive to the dynamic changes in the national economic structure; ③ The protection of infant industries must be conducive to the improvement of factor utilization.

1. The income attribution of domestic price increases caused by the implementation of protection is different.

2. Different price increases

3. Different adjustment mechanisms

4. The degree of monopoly impact on similar domestic enterprises is different.

5. Different levels of protection for domestic producers

6. Different impacts on consumers.

1) Price effect of tariffs: increasing the price of imported goods

2) The production effect of tariffs: Due to the increase in prices caused by the existence of tariffs, domestic production will increase and expand; the welfare of producers will be increased

3) The consumption effect of tariffs: Tariffs increase domestic prices. As long as the domestic demand elasticity is greater than zero, it will inevitably lead to a reduction in consumption, that is, the consumption effect of tariffs.

4) The tax effect of tariffs: Tariffs can increase the government’s tax revenue and increase a country’s fiscal revenue.

5) Net welfare effect of tariffs: Net welfare effect under small country conditions: Tariffs will reduce the level of social welfare;

1. Price effect. The price increase of imported goods from major countries is not equal to the tariff rate, but lower than the tariff rate.

2. Consumption effect: -The area of ​​(a b c d). It’s just that the area of ​​(a b c d) at this time is smaller than the area of ​​(a b c d) in the small country model.

3. Production effect: area of ​​a

4. Fiscal revenue effect: area of ​​(c e)

5. Terms of trade effect. Due to the imposition of tariffs, the international price of goods imported by a large country decreases. If the country's export prices remain unchanged, the country's terms of trade have improved, and its benefits are area e. e is equivalent to the portion of customs duties borne by foreign exporters. However, compared with small countries, assuming other conditions remain unchanged, the protective effect of tariffs in large countries on their own producers is relatively small. This is because price increases caused by tariffs in large countries are partially offset by falling prices in exporting countries, so the quantity of imports does not fall as much as in the case of smaller countries.

6. The net welfare effect is: e-(b d). It means that for large trading countries, it is uncertain whether tariffs will increase or reduce their level of social welfare. When e>(b d), the tariff imposed by a large country will increase its social welfare level; when e<(b d), it will reduce its social welfare level. (b d) is also a deadweight loss, e is equivalent to the portion of the tariff borne by the foreign exporter.

1) Non-tariff barriers are more flexible and targeted than tariff barriers: The formulation of non-tariff barrier measures usually adopts administrative procedures, which is more convenient. Corresponding measures can be taken at any time for a certain commodity in a certain country, and the restrictions can be reached quickly. Purpose of import

2) Non-tariff barriers can restrict imports more effectively than tariff barriers: If exporting countries use export subsidies, commodity dumping and other methods to reduce the cost and price of exported goods, tariffs are often unable to play a role in restricting the import of goods. However, non-tariff barrier measures can more effectively restrict imports.

3) Non-tariff barriers are more concealed and discriminatory than tariff barriers: after the tariff rate is determined, it must be implemented in accordance with the law. Some non-tariff barrier measures are often not public and change frequently, making it difficult for foreign exporters to deal with and adapt.

1) Dumping behavior exists in the exporting country

2) The industry of the importing country is substantially damaged or threatened with substantial damage

3) There is a causal relationship between the damage and the dumping behavior

The net welfare effect of implementing quotas is -(b d), or deadweight loss, which is the social cost of quotas.

b represents the net loss in production, caused by the increase in the production of imported substitutes in Q1Q2 and the decrease in resource use efficiency, that is, the welfare loss caused by the original consumption in Q1Q2 switching from imported low-cost goods to consuming domestic high-cost goods. d is the net loss in consumption, which is the welfare loss caused by the artificial increase in the price of imported goods after the implementation of quotas and the partial disappearance of the original consumption Q3Q4.

They are all means to restrict imports and are formulated and implemented uniformly by the government.

1) Attribution of income is different

2) Price increases vary in magnitude

3) Different impacts on consumers

4) Different levels of protection for domestic producers

5) The degree of monopoly impact on similar domestic production companies is different.

6) Different adjustment mechanisms

7) The procedures are different.

The first is his criticism of the classical school’s international trade theory.

The second is the protective trade policy he proposed.

(1) Oppose indiscriminate free trade and advocate a protection system under certain conditions

(2) Oppose laissez-faire and advocate state intervention in the economy

(3) Oppose the "comparative advantage theory" and advocate the development of productive forces

(4) Develop domestic industry, but do not exclude profitable division of labor

(5) Specific principles and measures to protect trade

📕Barriers to commodity trade have been removed among the participants of this integration organization, and free trade in commodities has truly been realized. [Obstacles limited to commodity trade]

📗The other is that there is no common external tariff among member countries

📘Easy to form, difficult to execute

📕Members of the Customs Union transfer tariff-setting powers to the Economic Integration Organization

📗The customs union also has certain limitations

📘A customs union only solves the problem of liberalizing the movement of goods at the borders between member states

📔The establishment of a common market requires the transfer of many rights, including the right to set import tariffs and non-tariff barriers

However, supranational integrated intervention capabilities are also limited

When the coordination of exchange rate policies reaches a certain level, such that a common currency or unified currency is established among member countries, this economic union is called an economic and monetary union.

Member states not only ceded the rights needed to establish a common market, but also ceded the right to use macroeconomic policies to intervene in their own economic operations.

1. Completely abolish tariffs between member states;

2. Set unified tariffs on imports;

3. Allocate tariff revenue among member countries through negotiation.

Internal freedom, external protection

trade creation effect

If a country switches from high-priced purchases from countries outside the alliance to low-priced purchases from alliance member states, it is also considered trade creation.

trade diversion effect

loss

Supply and demand are more elastic

2-There is a large difference in the cost of trade goods between the country and other member countries

3-The price and cost difference between partner countries and third countries or non-member countries for the same type of trade goods is small

& Assuming that the production cost of country C is fixed, the world price before the formation of the customs union is Pw, which is equal to the production cost of country C. Country B imposes tariffs on imported goods from all countries, and the price after tax is Pt. At this time, country A’s exports are fg and country B’s imports are ab. Part of the import volume of country B comes from country A, and the quantity imported from country A is ac, that is, ac = fg, while the remaining part is imported from country C, and the import quantity is cb

&After two countries A and B form a customs union, since country B exempts country A's imports from taxes but still imposes tariffs on country C's imports, the price of country A's goods in the market of country B is lower than the price of the same goods in country C. , so country B switches to importing only from country A. When the price rises to Pu, the trade between countries A and B reaches equilibrium, and country A's exports are equal to country B's imports, that is, hi = de

For country A, joining the customs union can achieve the purpose of expanding exports and increasing export revenue. This is undoubtedly of great practical significance to those countries with small domestic markets. Joining a customs union and using the regional market to expand exports and promote economic development is a good choice for these countries.

After the establishment of the customs union, while excluding products from third countries, it created good conditions for the mutual export of products among member countries. The domestic markets of all member countries form a unified regional market, and the market expansion effect created by the customs union triggers the performance of economies of scale for enterprises.

In order to gain a favorable position in competition, enterprises will inevitably improve production and operation efficiency, increase research and development income, enhance awareness of adopting new technologies, and continuously reduce production costs, thus creating a strong competitive atmosphere within the alliance and improving the economy. efficiency and promote technological progress.

The establishment of a customs union means the exclusion of products from non-member countries. Countries outside the union will transfer their production points to countries within the customs union, where they will be produced and sold directly in order to bypass unified tariff and non-tariff barriers.

The Trump administration's "trade war" against China was not launched on a whim, but long-term, premeditated, purposeful and targeted. Regarding the United States' policy of suppressing China, China cannot get into chaos, nor can it lose its rationality impulsively and take "retaliatory" actions on a large scale. This will only worsen the economic and trade relations between China and the United States, and ultimately lead to The United States has achieved its goal, but we ourselves have lost our right to speak. In the short term, first of all, we should face it calmly, and at the same time understand clearly that the reason why the United States launched this large-scale trade war against China is not simply due to the U.S. trade deficit, but the purpose is to regain the U.S. economic hegemony around the world and suppress The good growth momentum of emerging economies and the essence of Sino-US trade friction are also the ulterior motives of the United States. Only by clearly understanding the cause, purpose and essence of this Sino-US trade friction can we be calm and justified. Secondly, in the face of the aggressive measures of the United States, as a major country with certain influence in the world, we cannot just settle down, but fight back forcefully within a reasonable range, so as to ensure that our losses are minimized in the short term.

In the medium term, first of all, we must speed up the rational upgrading of the industrial structure. One of the important reasons why the United States can start a "trade war" with China is because China provides "opportunities" to the United States. China's scientific and technological capabilities are improving rapidly, and the high-tech electronic technology industry is developing at a rapid pace. However, the manufacturing industry is gradually aging as China As a modern society, China is facing a bottleneck period of upgrading and upgrading. Reasonable and rapid upgrading of its industrial structure is the best way for China to quickly jump over the middle-income trap. Secondly, we must pay attention to the protection of property rights and strengthen the construction of relevant laws and regulations. The United States has adopted "301" investigations against China and targeted Chinese electronic technology products. In the final analysis, our country has failed to attach great importance to the protection of intellectual property rights. The country has also lacked relevant laws and regulations for a long time. This is why my country and the United States have The big difference is that compared with the United States' high awareness of intellectual property protection and sound laws and regulations, my country's loopholes in this area have given the United States an opportunity to take advantage of it. Therefore, in the medium term, our country must improve the laws and regulations on intellectual property protection and adapt to the development of the times, so that it can effectively protect our country's high-tech electronic technology industry from being bullied in the world market, and actively respond to various risks and risks it will face in the future. challenge.

In the long term, first of all, we must think differently, seek common ground while reserving differences, and rebuild a win-win economic and trade partnership between China and the United States. To fully understand the reason why the United States launched this trade war against China, it is crucial to recognize the ideological differences between China and the United States. Thinking from the perspective of the United States, we must not only understand the Sino-US trade frictions from the perspective of American ideology In essence, we must also use the favorable aspects of U.S. policies toward China to actively improve Sino-U.S. economic and trade relations; seeking common ground while reserving differences, we should not only see the friction between Sino-U.S. economic and trade, but also see that in this big market of the world, China and the United States have already It is a relationship where you are part of me and you are part of me. The interests are both relative and mutual.

Secondly, we must strengthen all-round partnership building and reduce dependence on the United States. China has always been a promoter of economic globalization, and as the world's two important economies, China and the United States are even more deeply and mutually dependent on each other in economic and trade terms. But in the long run, the most fundamental purpose of my country's foreign policy is to promote all-round partnership building and achieve "extensive consultation, joint contribution, mutual benefit and win-win results." Therefore, one of the ways to fundamentally reduce Sino-US economic and trade frictions is to strengthen my country's exchanges and cooperation with other countries through policies such as the "One Belt, One Road" and reduce dependence on the United States.

1. Competition has intensified, specialization has deepened, and resource utilization efficiency has improved.

2. Obtain economies of scale

3. Stimulate investment

4. Promote technological progress

5. Improve the mobility of factors

6. Accelerate economic development

1) There are only two countries A and B in the world

2) Capital can move freely between two countries

3) The income generated from international investment can be equitably distributed between A and B.

4) The marginal product value of capital is in a decreasing state

Illustration (the total remains unchanged, everyone benefits)—the effect of international capital flows

1) Conducive to promoting the solution of the "two gaps" problem in underdeveloped countries

Improve economic structure

3) Conducive to the development of international financial markets, accelerating economic and financial integration; increasing national capital liquidity; stimulating financial speculation

4) Conducive to the adjustment of the international balance of payments to a certain extent

Breakthrough: It replaced perfect competition with monopoly and imperfect competition, and distinguished international direct investment from international portfolio investment.

Disadvantages: It is insufficient to explain the geographical layout of the transnationalization of the production sector and the behavior of transnational operations in the service industry.

monopoly on a certain technology

Oligopoly Characteristics of Industrial Organization Forms

A “surplus” of entrepreneurial or managerial talent

Have access to cheap raw materials and funds

1) Produce domestically, condense this advantage into goods, and enter the international market through export.

2) Enterprises can also transfer their technological advantages for a fee by issuing technology use licenses to foreign enterprises and directly realize their value in the technology market;

3) Enterprises choose to set up branches abroad through direct investment, produce and sell locally, and market their advantages locally.

*To some extent, intangible assets have the nature of "public goods";

*The pricing of intangible assets is troubled by information asymmetry;

*The existence of uncertainty makes the above-mentioned asymmetry difficult to overcome.

The so-called international production eclectic theory refers to the theory that multinational companies combine the ownership advantages of enterprises with location advantages in the market of imperfect competition and incorporate them into the internalization process of enterprises.

Assets and their ownership advantages that a country's enterprises own or can acquire but that foreign enterprises do not have or cannot acquire under the same conditions

1) Technical advantages 2) Enterprise size 3) Organizational capabilities 4) Financial and monetary advantages

The advantages brought by the ownership advantages that a country's enterprises have will be used internally. Only through internalization, the enterprise implements the exchange relationship between supply and demand within a common ownership, and uses the enterprise's own control procedures to allocate resources, can the enterprise's ownership advantage be maximized and maintain its monopoly advantage.

The advantages that enterprises have in terms of investment location. With ownership advantages and internalization advantages, companies need to invest in production and choose the best location

The first thing to choose is whether to produce domestically or invest in production abroad; secondly, once an enterprise decides to invest in production abroad, it must choose which country to invest in.

It should be determined by the above three advantages.

(1) Technical advantages

(2) Enterprise scale

(3) Organizational and management capabilities

(4) Financial and monetary advantages.

(1) Signing and executing a contract requires higher costs

(2) Buyers’ uncertainty about the value of the technology being sold

(3) Need to control the use of products

Four conditions for forming location advantages:

Goods: Visible Trade

Services: invisible trade

Income: employee compensation; conceptual wages, salaries and benefits received by individuals working in non-resident economies; remuneration for services provided to non-resident workers; investment income (excluding principal)

Current transfer: records the change of ownership of actual resources or financial products between residents and non-residents that does not involve economic returns, and is a one-way or free transfer of actual resources or financial products [Classification: transfers by governments at all levels; transfers by other departments 】

Refers to an account that records the international movement of asset ownership

—Capital account: reflects the transfer of assets and the acquisition or abandonment of non-produced, non-financial assets

—Financial account: reflects the changes in investment and borrowing between residents and non-residents, and consists of four parts [direct investment; securities investment; other investment; reserve assets]

Characteristics: lagging industrial structure; single industrial structure; low import and export price elasticity

[Structural balance of payments imbalances are particularly prominent in developing countries, are long-term, and difficult to reverse]

A sustainable balance of payments imbalance within a certain range is not necessarily a bad thing

And the continuous huge imbalance of international payments is worthy of vigilance.

1) Causes the depreciation of the domestic currency exchange rate. If the monetary authorities use foreign exchange reserves to intervene, the foreign exchange reserves may be exhausted.

2) The ability to pay is weakened, which may lead to a debt crisis in severe cases, affecting the country’s creditworthiness with foreign investors. The status of the local currency in international trade remains strong.

3) A reduction in the domestic money supply may lead to contraction, an increase in domestic unemployment, and a slowdown in economic growth.

1) Cause the appreciation of the domestic currency. If the monetary authorities intervene to form excessive foreign exchange reserves, the problem of foreign exchange savings investment management will become prominent.

2) An increase in the domestic money supply may lead to inflation, overheating of domestic investment, excessive economic growth, wasteful use of resources, etc.

3) It may cause international trade friction; the appreciation of the local currency will also be detrimental to the development of export trade.

4) The country provides a large amount of real resources for foreign consumption without improving the country’s welfare level.

Under the gold standard, a country's international balance of payments can automatically restore balance through the rise and fall of prices and the output and input of cash (i.e. gold). This automatic adjustment law is called the "price-cash flow mechanism" principle (or the "coin-price flow mechanism" principle). This is: "Hume mechanism"

Deficit➡️Gold outflow➡️Money supply decreases➡️Price falls➡️Exports increase and imports decrease➡️Balance of payments returns to balance➡️

Surplus➡️Gold inflow➡️Money supply increases➡️Price rises➡️Exports decrease and imports increase➡️Balance of payments returns to balance🔄

Fixed exchange rate system: Under the paper currency standard system, the monetary authorities of a country maintain the exchange rate unchanged by intervening in changes in the money supply and the foreign exchange market.

After the international balance of payments is imbalanced, the automatic adjustment of the international balance of payments depends on variables such as foreign exchange reserves and money supply, which in turn affect national income, prices, and interest rates.

🇨🇳 Home Country: Deficit ➡️Reduced foreign exchange reserves ➡️Reduced money supply ➡️Rising interest rates - [(capital inflow) capital financial account improvement] ➡️Reduced domestic consumption investment - [(reduced imports) current account improvement] ➡️Falling prices - [(exports) increase, import decrease) current account improvement]

💩Foreign countries: surplus➡️Forex reserves increase➡️Money supply increases➡️Interest rates fall—[(capital outflow) capital financial account improves]➡️Domestic consumption investment increases—[(increase imports) current account improves]➡️Wages and prices rise—[(exports) Decrease, increase in imports) Current account improvement]

How do domestic economic variables automatically adjust the balance of payments imbalance under fixed exchange rates?

From the analysis, it can be seen that under a fixed exchange rate system, the market adjustment of the international balance of payments can achieve the balance of international payments through changes in domestic macroeconomic variables. This means that under a fixed exchange rate system, the external equilibrium goal is achieved at the expense of internal equilibrium.

Deficit country cost

The cost of a surplus country

Under the floating exchange rate system, the monetary authorities do not intervene in the foreign exchange market, that is, they do not affect the supply and demand of foreign exchange through the increase or decrease of reserves, but are determined by the market's supply and demand for foreign exchange.

Balance of payments deficit➡️The demand for foreign exchange is greater than the supply➡️Forex prices rise➡️Exports increase and imports decrease➡️The balance of payments returns to balance➡️

Balance of payments surplus➡️Forex supply is less than demand➡️Foreign exchange prices fall➡️Imports decrease➡️Exports increase➡️Balance of payments returns to balance🔄

Automatic exchange rate adjustment function:

Under the floating exchange rate system, exchange rate changes can automatically adjust the balance of payments, which to a certain extent can isolate foreign economies from interfering with the domestic economy through the balance of payments.

(1) Assumptions of analysis

(2) Mechanism to adjust international exchange rates

(3) Conditions for functioning

(4) The impact of local currency depreciation on the terms of trade

(5) Defects

(1) Theoretical model

(2) Economic meaning

(3) Basic evaluation

(1) Assumptions

(2) Simple model

(3) Policy significance and evaluation

(4) Foreign exchange control

Illustration

Support increase and decrease policies (fiscal policy, monetary policy)

Expenditure conversion policy (exchange rate policy, direct control policy, policy matching)

Summary of policy matching

Refers to the imbalance in the balance of payments caused by short-term, non-deterministic or accidental factors, such as the deterioration of trade conditions due to factors such as climatic disasters, earthquakes, wars, economic sanctions, etc., resulting in imbalances in the balance of payments that are generally characterized by relatively large It's light and doesn't last long.

Refers to the imbalance in the balance of payments caused by fluctuations in a country's economic cycle. Characteristics: When a country's economy is in recession or depression, import demand declines and the current account will be in surplus; however, due to dim investment prospects and capital outflows increase, the capital account will be in deficit. Therefore, we cannot simply judge the direction of imbalance in the balance of payments. When a country's economy is in a period of prosperity, the current account will be in deficit and the capital account will be in surplus. The direction of the entire international balance of payments imbalance should also be judged comprehensively.

It refers to the imbalance in the international balance of payments caused by changes in the growth rate of a country's domestic money supply that cause changes in the country's price level at a certain exchange rate level. Features: Balance of payments imbalances are caused by changes in the growth rate of money supply. If the money supply growth rate is too high, the domestic price level will rise, resulting in a decline in exports, an increase in imports, a deterioration in the current balance of payments, and a deterioration in the international balance of payments; and vice versa.

It generally refers to changes in a country's economic conditions and conditions that cause changes in national income, which in turn affects changes in imports and exports, leading to imbalances in the international balance of payments.

It refers to the imbalance in the international balance of payments that occurs when the domestic economy and industrial structure cannot adapt to the world market and its changes. At the same time, the internal economic structure of an economy is imbalanced, such as imbalanced supply and demand structure, uneven regional development, uneven industry development, and accumulated consumption. Disequilibrium also has an important impact on the balance of payments. Features: long-term

It refers to the imbalance in the balance of payments caused by profit opportunities and risks arising from exchange rate changes under a floating exchange rate system. Characteristics: They all arise from short-term capital flows and are characterized by suddenness, large quantity and strong impact. (Such as the Mexican financial crisis in 1994 and the Southeast Asian financial turmoil in 1997)

The depreciation of the local currency has two effects on the trade balance: 1) price effect 2) trade volume effect

Trade deficit → External depreciation of the local currency → Decrease in domestic export prices (increase in import prices) → Increase in export volume (decrease in import volume) → Improvement in the international balance of payments;

Trade surplus → External appreciation of the local currency → Domestic export prices rise (import prices fall) → Export volume falls (import volumes rise) → International balance of payments improves

It is assumed that a country has insufficient employment and therefore has sufficient idle production resources to make the supply of export commodities fully elastic.

Even if a trade agreement is signed after devaluation, export supply will still be affected by understanding, decision-making, resources, production cycles, etc.

According to the analysis of Western macroeconomics, the equilibrium of a country's national income is: national income = consumption investment and government expenditure. If the economy is not a closed economy but an open economy, the equilibrium of the national income of the economy is: national income = consumption investment Government expenditure (exports - imports). That is, Y=C I G (X-M)——X-M=Y- (C I G)

We can roughly think that .

Its economic meaning is that if national income is greater than total expenditure, international expenditure will be in surplus; if national income is less than total expenditure, international balance of payments will be in deficit. National income is equal to total expenditure, and the balance of international payments is in balance. When the international balance of payments is in deficit, there are two ways to use fiscal measures to adjust, either to adjust national income or to adjust absorption. The former requires the reallocation of resources to improve overall productivity, which requires idle resources; the latter It allows consumption, investment and government spending to be adjusted, compressing when there is a deficit and expanding when there is a surplus. In short, by changing income and absorption to adjust the unbalanced international balance of payments, and at the same time make the total supply equal to the total demand, in order to achieve a common balance between internal and external, and promote balanced economic development.

This method is well integrated with macroeconomics, but it involves the actual utilization level of resources, the contradiction between imported production equipment to increase productivity and the continued deterioration of the international balance of payments. It also has the problem of time lag, and ignores the role of currency in theory and policy. Role in adjusting the balance of payments.

basic exchange rate

arbitrage exchange rate

buying rate

selling rate

central exchange rate

cash exchange rate

wire transfer exchange rate

Credit exchange rate

bill exchange rate

spot exchange rate

forward exchange rate

This theory holds that the ratio of the value of the currencies of two countries is expressed as the ratio of the legal gold content of the currency, which is the basis for the determination of the exchange rate.

Basic point

Theoretical core

content

evaluate

In practice, people's psychological parity will be affected by both the quality and quantity of foreign exchange: the former is the specific purchasing power of currency, the ability to pay debts, institutional factors, etc.; the latter is the balance of payments, currency quantity, financial status, etc., both Only combination can form a complete subjective evaluation of foreign exchange.

Evaluation: The basis of this theory is the subjective utility theory of the Austrian School. It is idealistic to replace the objective process with subjective judgment. In the world economy, especially when a large amount of international capital impacts the financial market, people's psychological factors have an increasing impact on exchange rate trends, and corresponding attention should be paid to seeking advantages and avoiding disadvantages.

This theory believes that the exchange rate is to some extent the price of assets, not just the price of commodities. Its situation depends more on the equilibrium and changes in the asset market.

People's choice of asset forms, that is, asset replacement and capital flows, if large and too frequent, may cause large-scale capital flows, which will have a far greater impact on the balance of payments in the short or even medium term than the current account.

Evaluation: From a theoretical perspective, capital flow is only one type of transactions in the balance of payments, so it is just the development of the international lending theory, and based on the increasing impact of capital flows in the world economy, the focus is on capital flows. The scope of this theory is therefore somewhat narrower.

The balance of international payments is one of a country's macroeconomic goals. In order to achieve balance, people always use exchange rate changes as a policy tool. Therefore, a certain exchange rate is determined based on economic conditions, and other means such as finance and finance are used to achieve economic growth. The ultimate goal is that the exchange rate should be determined by economic objectives, and intervention is considered necessary.

Evaluation: The realization of the four major macroeconomic goals is contradictory. The applicability of this statement is limited, or it can only be focused on in actual use. Certain economic goals must be given up to ensure the realization of other economic goals.

The flow analysis focusing on the exchange rate was further developed into the analysis focusing on the flow and stock structure, and the currency stock-flow analysis of the exchange rate was proposed. At the same time, the exchange rate analysis was reversed from overemphasis on the current account to the emphasis on capital, emphasizing the role of monetary factors in the exchange rate. Role in Decision and Change.​

The exchange rate between domestic and foreign currencies depends on the comparison of the purchasing power of the two currencies.

The fundamental reason for a country's exchange rate changes is the change in purchasing power, and the reason for the change in purchasing power is the change in prices. Therefore, the change in the exchange rate is ultimately determined by the change in the price level ratio of the two countries.

law of one price

1) Affect the rise or fall of prices:

2) Under certain circumstances, the production departments that affect export commodities:

1) Impact on a country’s capital flows: In the long term, when the local currency exchange rate declines, domestic capital often flees abroad to prevent losses from currency depreciation. In particular, international short-term capital or other investments stored in domestic banks will also be adjusted. Go to other countries to prevent losses. If the local currency exchange rate rises, the impact on capital movement will be opposite to the above situation. There are also special circumstances. In recent years, when the U.S. dollar exchange rate has declined in the short term, foreign capital has surged into the United States for direct investment and securities investment, taking advantage of the opportunity of the U.S. dollar's depreciation to obtain greater investment returns. The sharp decline in the US dollar exchange rate has certain benefits, but this situation occurs due to the special status of the US dollar.

2) Impact on foreign trade: The decline in the value of the local currency has the effect of expanding the country's exports and inhibiting the country's imports, which may reverse the trade balance deficit.

3) Impact on the tourism sector: Other conditions remaining unchanged, foreign currency prices expressed in local currency will increase, while domestic price levels remain unchanged. To foreign tourists, domestic goods and services will appear cheaper, which can promote domestic tourism and related trade. Increase in income.

1) Exchange rate changes in reserve currencies affect the actual value of a country’s foreign exchange reserves. If the reserve currency appreciates, the actual value of a country’s foreign exchange reserves will increase, and vice versa.

2) Changes in the domestic currency exchange rate directly affect the increase or decrease in the country's foreign exchange reserves through capital transfers and increases or decreases in import and export trade volume.

3) Exchange rate changes affect the status and role of certain reserve currencies

1) Assumption: The initial state of a country is sub-full employment

2) Policy choice: expansionary monetary policy

3) Consequences of the policy: falling interest rates; capital outflows; deterioration of the balance of payments; depreciation of the local currency

4) Different results from fixed exchange rates: no need to intervene in the foreign exchange market - the local currency depreciates, exports increase, the balance of payments automatically improves, and the depreciation trend is alleviated; in addition, interest rates fall, domestic investment I increases, and national income increases; the balance of payments and National income has reached a new equilibrium level; it has solved the problem of insufficient employment;

1) Capital is immobile: unresponsive to changes in interest rates

2) Limited capital flow A: Not very responsive to changes in interest rates

3) Limited capital flow B: more responsive to changes in interest rates

4) Complete free flow of capital: extremely responsive to changes in interest rates

Funds are completely illiquid

Funds can flow under certain conditions

Funds are fully mobile

Funds are completely illiquid

Funds can flow under certain conditions

Funds are fully mobile

Funds are completely illiquid

Funds can flow under certain conditions

Funds are fully mobile

Funds are completely illiquid

Funds can flow under certain conditions

Implementing market diversification will help our country reduce the risks caused by over-reliance on certain markets; help disperse foreign trade risks, reduce friction, and improve overall economic benefits; expand the export scale of our country's commodities and maintain the continued growth of foreign trade exports.

my country's current market diversification strategy is to focus on the Asia-Pacific market, support neighboring countries, and reasonably distribute the markets of developed countries and developing countries. The details are as follows: First, consolidate and deeply develop traditional export markets such as Western developed countries and Hong Kong and Macao, and formulate corresponding development strategies based on the different characteristics of each market. Second, focus on exploring and developing markets in developing countries and regions in Asia, Africa, and Latin America. Third, actively expand and develop the markets of the CIS and Eastern European countries. Fourth, actively expand markets in neighboring countries.

Only with a solid scientific and technological foundation can we adjust the structure of export commodities as soon as possible, thereby greatly improving the international competitiveness of our country's export commodities. In order to optimize the export commodity structure and improve international competitiveness, the first thing to do is to strive to expand the export of high-tech, high-value-added mechanical and electrical products and high-tech products. Accelerate the integration of scientific research institutes and manufacturing enterprises, the integration of manufacturing enterprises and foreign trade enterprises, realize the integration of science, industry and trade, and promote the high-tech industrialization of mechanical and electrical products. After forming a large number of enterprises with independent intellectual property rights, we will promote more mechanical and electrical products to the international market with higher technical standards, and ultimately realize the share of high-tech, high-tech capital- and technology-intensive goods in the export trade. dominant position.

Our country should realize a gradient industrial layout across the country and implement a diversified and differentiated export policy. Encourage enterprises to increase investment in research and development and brand building, and realize the transformation of product structure from extensive and quantitative expansion to intensive, quality and efficiency. At present, our country can take corresponding incentive measures to encourage enterprises to actively develop technological products with high technological content, increase the added value of products, establish a sense of brand competition, cultivate international brands, and fundamentally optimize the structure of commodities.

The key to optimizing the structure of export commodities lies in the improvement of technical level. The key to improving technical level lies in the quantity and quality of domestic R&D personnel, technical operators and other high-end talents. Optimizing the labor market structure and doing everything possible to increase the supply of high-end talents are the fundamental ways to optimize the structure of my country's export commodities. To this end, it is necessary to not only improve the skill level of existing workers, independently cultivate high-end talents, introduce talents from overseas, but also prevent brain drain.

First, encourage foreign investment to invest in basic industries, infrastructure and high-tech industries. Guide foreign businessmen to increase investment in primary and tertiary industries.

Second, formulate appropriate industrial policies, implement preferential policies that focus on industries, and provide key support for foreign direct investment in technology-intensive industries.

Third, encourage foreign businessmen to carry out R&D activities in China

Implement a unified export incentive system for new products of foreign-invested enterprises. And provide tax reduction and interest subsidy support to foreign direct investment projects that can provide key technologies and core technologies. Improve intellectual property protection laws and regulations and strengthen their implementation to create safe legal conditions for foreign businessmen's innovative activities and technology trade.

Improving processing trade policies and promoting the transformation and upgrading of processing trade are important ways to optimize the structure of my country's export commodities. Government departments can formulate relevant policies to encourage processing trade enterprises to reform, and by increasing investment in technological reform, they can vigorously cultivate workers' assembly capabilities and deep processing capabilities, and transform traditional industries. Attract multinational companies to transfer higher-tech production links to my country, reduce the domestic processing of "two high-tech and one capital" products, and realize the gradual transformation of my country's processing trade from labor-intensive industries to capital and technology through the absorption and digestion of technology. Transformation to focus on intensive industries.

On the other hand, implement the idea of ​​classified management and realize the coexistence of multiple management models. According to national industry, environmental protection and other policies as well as regulatory cost efficiency, clarify the applicable scope of processing trade policies; improve special area management policies, further implement the policy positioning of export processing zones and bonded zones, and give full play to their advantages in regional closed management.