ch08-The-Instruments-of-Trade-Policy-克鲁格曼国际经济学第六版英课件.ppt

1、Prepared by Iordanis PetsasTo Accompany,Sixth Editionby Paul R.Krugman and Maurice ObstfeldSlide 8-2Copyright 2003 Pearson Education,Inc.IntroductionBasic Tariff AnalysisCosts and Benefits of a TariffOther Instruments of Trade PolicyThe Effects of Trade Policy:A SummarySummaryAppendix I:Tariff Analy

2、sis in General EquilibriumAppendix II:Tariffs and Import Quotas in the Presence of MonopolyChapter OrganizationSlide 8-3Copyright 2003 Pearson Education,Inc.IntroductionThis chapter is focused on the following questions:What are the effects of various trade policy instruments?Who will benefit and wh

3、o will lose from these trade policy instruments?What are the costs and benefits of protection?Will the benefits outweigh the costs?What should a nations trade policy be?For example,should the United States use a tariff or an import quota to protect its automobile industry against competition from Ja

4、pan and South Korea?Slide 8-4Copyright 2003 Pearson Education,Inc.Classification of Commercial Policy Instruments IntroductionCommercial Policy InstrumentsTrade Contraction Trade Expansion Tariff Export taxImport quotaVoluntary Export Restraint(VER)Import subsidyExport subsidyVoluntary Import Expans

5、ion(VIE)Price Quantity Price Quantity Slide 8-5Copyright 2003 Pearson Education,Inc.Basic Tariff AnalysisTariffs can be classified as:Specific tariffs Taxes that are levied as a fixed charge for each unit of goods imported Example:A specific tariff of$10 on each imported bicycle with an internationa

6、l price of$100 means that customs officials collect the fixed sum of$10.Ad valorem tariffs Taxes that are levied as a fraction of the value of the imported goods Example:A 20%ad valorem tariff on bicycles generates a$20 payment on each$100 imported bicycle.Slide 8-6Copyright 2003 Pearson Education,I

7、nc.A compound duty(tariff)is a combination of an ad valorem and a specific tariff.Modern governments usually prefer to protect domestic industries through a variety of nontariff barriers,such as:Import quotas Limit the quantity of imports Export restraints Limit the quantity of exportsBasic Tariff A

8、nalysisSlide 8-7Copyright 2003 Pearson Education,Inc.Supply,Demand,and Trade in a Single IndustrySuppose that there are two countries(Home and Foreign).Both countries consume and produce wheat,which can be costless transported between the countries.In each country,wheat is a competitive industry.Sup

9、pose that in the absence of trade the price of wheat at Home exceeds the corresponding price at Foreign.This implies that shippers begin to move wheat from Foreign to Home.The export of wheat raises its price in Foreign and lowers its price in Home until the initial difference in prices has been eli

10、minated.Basic Tariff AnalysisSlide 8-8Copyright 2003 Pearson Education,Inc.To determine the world price(Pw)and the quantity trade(Qw),two curves are defined:Home import demand curve Shows the maximum quantity of imports the Home country would like to consume at each price of the imported good.That i

11、s,the excess of what Home consumers demand over what Home producers supply:MD=D(P)S(P)Foreign export supply curve Shows the maximum quantity of exports Foreign would like to provide the rest of the world at each price.That is,the excess of what Foreign producers supply over what foreign consumers de

12、mand:XS=S*(P*)D*(P*)Basic Tariff AnalysisSlide 8-9Copyright 2003 Pearson Education,Inc.Quantity,QPrice,PPrice,PQuantity,QMDDSAPAP2P1S2D2D2 S22S1D1D1 S11Figure 8-1:Deriving Homes Import Demand CurveBasic Tariff AnalysisSlide 8-10Copyright 2003 Pearson Education,Inc.Properties of the import demand cur

13、ve:It intersects the vertical axis at the closed economy price of the importing country.It is downward sloping.It is flatter than the domestic demand curve in the importing country.Basic Tariff AnalysisSlide 8-11Copyright 2003 Pearson Education,Inc.P2P*AD*S*P1XSPrice,PPrice,PQuantity,QQuantity,QS*2

14、D*2S*2D*2Figure 8-2:Deriving Foreigns Export Supply CurveBasic Tariff AnalysisD*1S*1S*1 D*1Slide 8-12Copyright 2003 Pearson Education,Inc.Properties of the export supply curve:It intersects the vertical axis at the closed economy price of the exporting country.It is upward sloping.It is flatter that

15、 the domestic supply curve in the exporting country.Basic Tariff AnalysisSlide 8-13Copyright 2003 Pearson Education,Inc.Figure 8-3:World EquilibriumXSPrice,PQuantity,QMDPWQW1Basic Tariff AnalysisSlide 8-14Copyright 2003 Pearson Education,Inc.Useful definitions:The terms of trade is the relative pric

16、e of the exportable good expressed in units of the importable good.A small country is a country that cannot affect its terms of trade no matter how much it trades with the rest of the world.The analytical framework will be based on either of the following:Two large countries trading with each otherA

17、 small country trading with the rest of the worldBasic Tariff AnalysisSlide 8-15Copyright 2003 Pearson Education,Inc.Effects of a TariffAssume that two large countries trade with each other.Suppose Home imposes a tax of$2 on every bushel of wheat imported.Then shippers will be unwilling to move the

18、wheat unless the price difference between the two markets is at least$2.Figure 8-4 illustrates the effects of a specific tariff of$t per unit of wheat.Basic Tariff AnalysisSlide 8-16Copyright 2003 Pearson Education,Inc.XSPTMDD*S*DSPW2QT1QWBasic Tariff AnalysisFigure 8-4:Effects of a TariffP*T3tPrice

19、,PQuantity,QPrice,PQuantity,QPrice,PQuantity,QHome marketWorld marketForeign marketHome marketWorld marketForeign marketSlide 8-17Copyright 2003 Pearson Education,Inc.In the absence of tariff,the world price of wheat(Pw)would be equalized in both countries.With the tariff in place,the price of wheat

20、 rises to PT at Home and falls to P*T(=PT t)at Foreign until the price difference is$t.In Home:producers supply more and consumers demand less due to the higher price,so that fewer imports are demanded.In Foreign:producers supply less and consumers demand more due to the lower price,so that fewer ex

21、ports are supplied.Thus,the volume of wheat traded declines due to the imposition of the tariff.Basic Tariff AnalysisSlide 8-18Copyright 2003 Pearson Education,Inc.The increase in the domestic Home price is less than the tariff,because part of the tariff is reflected in a decline in Foreign s export

22、 price.If Home is a small country and imposes a tariff,the foreign export prices are unaffected and the domestic price at Home(the importing country)rises by the full amount of the tariff.Basic Tariff AnalysisSlide 8-19Copyright 2003 Pearson Education,Inc.Figure 8-5:A Tariff in a Small CountrySPrice

23、,PQuantity,QDPW+tPWImports after tariffS1D1Imports before tariffD2S2Basic Tariff AnalysisSlide 8-20Copyright 2003 Pearson Education,Inc.Measuring the Amount of ProtectionIn analyzing trade policy in practice,it is important to know how much protection a trade policy actually provides.One can express

24、 the amount of protection as a percentage of the price that would prevail under free trade.Two problems arise from this method of measurement:In the large country case,the tariff will lower the foreign export price.Tariffs may have different effects on different stages of production of a good.Basic

25、Tariff AnalysisSlide 8-21Copyright 2003 Pearson Education,Inc.Effective rate of protection One must consider both the effects of tariffs on the final price of a good,and the effects of tariffs on the costs of inputs used in production.The actual protection provided by a tariff will not equal the tar

26、iff rate if imported intermediate goods are used in the production of the protected good.Example:A European airplane that sells for$50 million has cost$60 million to produce.Half of the purchase price of the aircraft represents the cost of components purchased from other countries.A subsidy of$10 mi

27、llion from the European government cuts the cost of the value added to purchasers of the airplane from$30 to$20 million.Thus,the effective rate of protection is(30-20)/20=50%.Basic Tariff AnalysisSlide 8-22Copyright 2003 Pearson Education,Inc.Costs and Benefits of a TariffA tariff raises the price o

28、f a good in the importing country and lowers it in the exporting country.As a result of these price changes:Consumers lose in the importing country and gain in the exporting countryProducers gain in the importing country and lose in the exporting countryGovernment imposing the tariff gains revenueTo

29、 measure and compare these costs and benefits,we need to define consumer and producer surplus.Slide 8-23Copyright 2003 Pearson Education,Inc.Consumer and Producer SurplusConsumer surplus It measures the amount a consumer gains from a purchase by the difference between the price he actually pays and

30、the price he would have been willing to pay.It can be derived from the market demand curve.Graphically,it is equal to the area under the demand curve and above the price.Example:Suppose a person is willing to pay$20 per packet of pills,but the price is only$5.Then,the consumer surplus gained by the

31、purchase of a packet of pills is$15.Costs and Benefits of a TariffSlide 8-24Copyright 2003 Pearson Education,Inc.8$129$1010$911DFigure 8-6:Deriving Consumer Surplus from the Demand CurveCosts and Benefits of a TariffPrice,PQuantity,QSlide 8-25Copyright 2003 Pearson Education,Inc.Figure 8-7:Geometry

32、of Consumer SurplusCosts and Benefits of a TariffabP1P2DPrice,PQuantity,QQ2Q1Slide 8-26Copyright 2003 Pearson Education,Inc.Producer surplus It measures the amount a producer gains from a sale by the difference between the price he actually receives and the price at which he would have been willing

33、to sell.It can be derived from the market supply curve.Graphically,it is equal to the area above the supply curve and below the price.Example:A producer willing to sell a good for$2 but receiving a price of$5 gains a producer surplus of$3.Costs and Benefits of a TariffSlide 8-27Copyright 2003 Pearso

34、n Education,Inc.Figure 8-8:Geometry of Producer SurplusCosts and Benefits of a TariffdcP2P1SPrice,PQuantity,QQ2Q1Slide 8-28Copyright 2003 Pearson Education,Inc.Costs and Benefits of a TariffMeasuring the Cost and BenefitsIs it possible to add consumer and producer surplus?We can(algebraically)add co

35、nsumer and producer surplus because any change in price affects each individual in two ways:As a consumer As a worker We assume that at the margin a dollars worth of gain or loss to each group is of the same social worth.Slide 8-29Copyright 2003 Pearson Education,Inc.Figure 8-9:Costs and Benefits of

36、 a Tariff for the Importing CountryCosts and Benefits of a TariffPTPWP*TbcdeDa=consumer loss(a+b+c+d)=producer gain(a)=government revenue gain(c+e)QTD2S2SS1D1Price,PQuantity,QSlide 8-30Copyright 2003 Pearson Education,Inc.The areas of the two triangles b and d measure the loss to the nation as a who

37、le(efficiency loss)and the area of the rectangle e measures an offsetting gain(terms of trade gain).The efficiency loss arises because a tariff distorts incentives to consume and produce.Producers and consumers act as if imports were more expensive than they actually are.Triangle b is the production

38、 distortion loss and triangle d is the consumption distortion loss.The terms of trade gain arises because a tariff lowers foreign export prices.Costs and Benefits of a TariffSlide 8-31Copyright 2003 Pearson Education,Inc.If the terms of trade gain is greater than the efficiency loss,the tariff incre

39、ases welfare for the importing country.In the case of a small country,the tariff reduces welfare for the importing country.Costs and Benefits of a TariffSlide 8-32Copyright 2003 Pearson Education,Inc.Figure 8-10:Net Welfare Effects of a TariffPTPWP*TbdeD=efficiency loss(b+d)=terms of trade gain(e)Im

40、portsSPrice,PQuantity,QCosts and Benefits of a TariffSlide 8-33Copyright 2003 Pearson Education,Inc.Export Subsidies:TheoryExport subsidy A payment by the government to a firm or individual that ships a good abroad When the government offers an export subsidy,shippers will export the good up to the

41、point where the domestic price exceeds the foreign price by the amount of the subsidy.It can be either specific or ad valorem.Other Instruments of Trade PolicySlide 8-34Copyright 2003 Pearson Education,Inc.baFigure 8-11:Effects of an Export SubsidyOther Instruments of Trade PolicyPSPWP*SPrice,PQuant

42、ity,QExportsgfeSubsidydc=producer gain (a+b+c)=consumer loss(a+b)=cost of government subsidy (b+c+d+e+f+g)DSSlide 8-35Copyright 2003 Pearson Education,Inc.An export subsidy raises prices in the exporting country while lowering them in the importing country.In addition,and in contrast to a tariff,the

43、 export subsidy worsens the terms of trade.An export subsidy unambiguously leads to costs that exceed its benefits.Other Instruments of Trade PolicySlide 8-36Copyright 2003 Pearson Education,Inc.Figure 8-12:Europes Common Agricultural ProgramOther Instruments of Trade PolicyPrice,PQuantity,QSDEU pri

44、ce without importsWorld price=cost of government subsidySupport priceExportsSlide 8-37Copyright 2003 Pearson Education,Inc.Import Quotas:TheoryAn import quota is a direct restriction on the quantity of a good that is imported.Example:The United States has a quota on imports of foreign cheese.The res

45、triction is usually enforced by issuing licenses to some group of individuals or firms.Example:The only firms allowed to import cheese are certain trading companies.In some cases(e.g.sugar and apparel),the right to sell in the United States is given directly to the governments of exporting countries

46、.Other Instruments of Trade PolicySlide 8-38Copyright 2003 Pearson Education,Inc.An import quota always raises the domestic price of the imported good.License holders are able to buy imports and resell them at a higher price in the domestic market.The profits received by the holders of import licens

47、es are known as quota rents.Other Instruments of Trade PolicySlide 8-39Copyright 2003 Pearson Education,Inc.Welfare analysis of import quotas versus of that of tariffs The difference between a quota and a tariff is that with a quota the government receives no revenue.In assessing the costs and benef

48、its of an import quota,it is crucial to determine who gets the rents.When the rights to sell in the domestic market are assigned to governments of exporting countries,the transfer of rents abroad makes the costs of a quota substantially higher than the equivalent tariff.Other Instruments of Trade Po

49、licySlide 8-40Copyright 2003 Pearson Education,Inc.Price in U.S.Market 466World Price 280bcdDemanda8.456.32Supply5.149.26Price,$/tonQuantity of sugar,million tonsFigure 8-13:Effects of the U.S.Import Quota on SugarOther Instruments of Trade PolicyImport quota:2.13 million tons=consumer loss (a+b+c+d

50、)=producer gain(a)=quota rents(c)Slide 8-41Copyright 2003 Pearson Education,Inc.Voluntary Export RestraintsA voluntary export restraint(VER)is an export quota administered by the exporting country.It is also known as a voluntary restraint agreement(VRA).VERs are imposed at the request of the importe