ECON500-Global-Economics

Use tariff welfare decomposition to separate revenue, redistribution, protective, and consumption effects. For a small nation, producer and government gains are transfers while protective and consumption effects are national losses; a large nation may gain through terms of trade but risks retaliation.

A tariff fixes a price wedge and lets import volumes adjust, generating government revenue. A quota fixes quantity, creates quota rent captured by license holders or foreign exporters, and becomes more restrictive as demand grows.

Use the formula e = (n - a*b)/(1-a), where n is the final-good tariff, a is the imported-input share, and b is the input tariff. This measures protection on domestic value added rather than the headline nominal rate.

Depreciation improves the trade balance when the Marshall-Lerner condition holds, meaning the sum of import and export demand elasticities exceeds one. Allow for the J-curve delay and check that output rises relative to absorption.

It covers 17 chapters spanning trade theory, trade policy, developing-nation strategies, regional integration, balance of payments, foreign exchange, exchange-rate regimes, and international banking and debt, based on Carbaugh's International Economics.

The models are stylized and their assumptions must be checked before applying them to current data, country-specific institutions, forecasts, or investment decisions. For unindexed topics, consult the chapter files or domain-specific sources.