International Economics, 13/e (AE-Paperback)

Chapter 1 has been thoroughly revised and updated to reflect the dramatic economic and financial changes that have taken place in the world economy since the last edition of this text. Section 1.6 has been thoroughly revised to identify the major international economic (trade and financial) problems facing the United States and the world today and so has the discussion in Chapter 21 (Section 21.6), which examines how they can be resolved.

The rapid globalization of the world economy is providing maj6r benefits to most countries, but it is also presenting many challenges to poor countries that are unable to take advantage of globalization, as well as to the United States and other advanced countries, which face increasing competition from some emerging markets, especially China. These topics are discussed in several new sections and case studies in the trade and finance part of the text.

The dollar-euro and dollar-RMB exchange rates are much in the news these days as are the huge and unsustainable trade deficits of the United States. The relationship between U.S. trade deficits, trade protectionism, and misaligned exchange rates is examined, both theoretically and empirically, and in all of its ramifications, in several trade and finance sections and case studies in this new edition of the text. 

Besides its effect on international trade and international competitiveness, the continuing globalization of the world economy and liberalization of international capital markets have further eroded governments' control over national economic and financial matters. Exchange rates exhibit great volatility and large misalignments, which interfere with the flow of international trade and investments and the comparative advantage of nations. At the same time, international macroeconomic policy coordination has not progressed sufficiently to deal adequately with the potential problems and challenges that increased inter dependence in world financial markets created.

The 13th edition of the text also presents an in-depth analysis of the dangerous structural imbalances in the world economy and provides an evolution of the policy options available to deal with them. The major imbalances in the world economy today are the huge trade and budget (twin) deficits of the United States, the slow growth and high unemployment in Europe, the decade-long stagnation in Japan, the serious competitive challenge for both advanced and developing countries provided by the competition from China, the danger of financial and economic crises in .advanced and emerging market economies, world poverty, resource scarcity, and environmental degradation. All of these topics are addressed in this edition of the text.

There are 127 case studies in the text. Many are new and the others have been thoroughly revised.

Dominick Salvatore - Fordham University

1 Introduction
Part 1 International Trade Theory
2 The Law of Comparative Advantage
3 The Standard Theory of International Trade
4 Demand and Supply, Offer Curves, and the Terms of Trade
5 Factor Endowments and the Heckscher–Ohlin Theory
6 Economies of Scale, Imperfect Competition, and International Trade
7 Economic Growth and International Trade
Part 2 International Trade Policy
8 Trade Restrictions: Tariffs
9 Nontariff Trade Barriers and the New Protectionism
10 Economic Integration: Customs s and Free Trade Areas
11 International Trade and Economic Development
12 International Resource Movements and Multinational Corporations
Part 3 The Balance of Payments, Foreign Exchange Markets, and Exchange Rates
13 Balance of Payments
14 Foreign Exchange Markets and Exchange Rates
15 Exchange Rate Determination
Part 4 Open-Economy Macroeconomics and the International Monetary System
16 The Price Adjustment Mechanism with Flexible and Fixed Exchange Rates
17 The Income Adjustment Mechanism and Synthesis of Automatic Adjustments
18 Open-Economy Macroeconomics: Adjustment Policies
19 Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply
20 Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination
21 The International Monetary System: Past, Present, and Future
Answers to Selected Problems