IDEAS home Printed from https://ideas.repec.org/a/ris/integr/0112.html
   My bibliography  Save this article

Production and the Trade Balance in a Small Open Economy

Author

Listed:
  • Thompson, Henry

    () (Auburn University)

Abstract

The trade balance is built directly into a factor proportions model of produc - tion. A wealth stockpile of the exported good is maintained, growing when the small open economy has a surplus and shrinking with a deficit. Income and prices determine consumption of exports and imports, while production adjusts to maintain full employment and competitive pricing. The trade balance effects of an import tariff and an export subsidy (equivalently, a devaluation) depend on factor intensity, factor substitution, demand, and factor endowments. Chang - ing factor endowments have no net effect on the trade balance, a reflection of factor price equalization.

Suggested Citation

  • Thompson, Henry, 1999. "Production and the Trade Balance in a Small Open Economy," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 14, pages 432-441.
  • Handle: RePEc:ris:integr:0112
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jong Eun Lee, 2004. "The sequential issue in free trade areas: Policy implication for Korea," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 9(2), pages 165-174.

    More about this item

    Keywords

    trade balance; small open economy; tariff; subsidy; factor endowments;

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F20 - International Economics - - International Factor Movements and International Business - - - General
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:integr:0112. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jong-Eun Lee). General contact details of provider: http://edirc.repec.org/data/desejkr.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.