International Economics: Theory and Policy Solution
Instructor’s Manual to accompany
Krugman & Obstfeld
International Economics:
Theory and Policy
Sixth Edition
Linda S. Goldberg
Federal Reserve Bank of New York
Michael W. Klein
Tufts University
The Fletcher School of Law and Diplomacy
Jay C. Shambaugh
Dartmouth College
The views presented in this book are those of the authors and need not reflect the views of the
Federal Reserve Bank of New York or the Federal Reserve System.
Contents
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Chapter 13
Chapter 14
Chapter 15
Chapter 16
Chapter 17
Chapter 18
Chapter 19
Chapter 20
Chapter 21
Chapter 22
page
Contents
iii
Introduction
1
Overview of Section I: International Trade Theory
3
Labor Productivity and Comparative Advantage: The Ricardian Model 7
Specific Factors and Income Distribution
13
Resources and Trade: The Heckscher-Ohlin Model
21
The Standard Trade Model
27
Economies of Scale, Imperfect Competition, and International Trade 35
International Factor Movements
41
Overview of Section II: International Trade Policy
47
The Instruments of Trade Policy
49
The Political Economy of Trade Policy
57
Trade Policy in Developing Countries
65
Controversies in Trade Policy
71
Overview of Section III: Exchange Rates and Open Economy
Macroeconomics
77
National Income Accounting and the Balance of Payments
81
Exchange Rates and the Foreign Exchange Market:
89
An Asset Approach
Money, Interest Rates, and Exchange Rates
101
Price Levels and the Exchange Rate in the Long Run
109
Output and the Exchange Rate in the Short Run
119
Fixed Exchange Rates and Foreign Exchange Intervention
131
Overview of Section IV: International Macroeconomic Policy
141
The International Monetary System, 1870-1973
145
Macroeconomic Policy and Coordination Under
153
Floating Exchange Rates
Optimum Currency Areas and the European Experience
163
The Global Capital Market: Performance and Policy Problems
171
Developing Countries:
Krugman & Obstfeld
International Economics:
Theory and Policy
Sixth Edition
Linda S. Goldberg
Federal Reserve Bank of New York
Michael W. Klein
Tufts University
The Fletcher School of Law and Diplomacy
Jay C. Shambaugh
Dartmouth College
The views presented in this book are those of the authors and need not reflect the views of the
Federal Reserve Bank of New York or the Federal Reserve System.
Contents
Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Chapter 13
Chapter 14
Chapter 15
Chapter 16
Chapter 17
Chapter 18
Chapter 19
Chapter 20
Chapter 21
Chapter 22
page
Contents
iii
Introduction
1
Overview of Section I: International Trade Theory
3
Labor Productivity and Comparative Advantage: The Ricardian Model 7
Specific Factors and Income Distribution
13
Resources and Trade: The Heckscher-Ohlin Model
21
The Standard Trade Model
27
Economies of Scale, Imperfect Competition, and International Trade 35
International Factor Movements
41
Overview of Section II: International Trade Policy
47
The Instruments of Trade Policy
49
The Political Economy of Trade Policy
57
Trade Policy in Developing Countries
65
Controversies in Trade Policy
71
Overview of Section III: Exchange Rates and Open Economy
Macroeconomics
77
National Income Accounting and the Balance of Payments
81
Exchange Rates and the Foreign Exchange Market:
89
An Asset Approach
Money, Interest Rates, and Exchange Rates
101
Price Levels and the Exchange Rate in the Long Run
109
Output and the Exchange Rate in the Short Run
119
Fixed Exchange Rates and Foreign Exchange Intervention
131
Overview of Section IV: International Macroeconomic Policy
141
The International Monetary System, 1870-1973
145
Macroeconomic Policy and Coordination Under
153
Floating Exchange Rates
Optimum Currency Areas and the European Experience
163
The Global Capital Market: Performance and Policy Problems
171
Developing Countries: