Absolute and Comparative Advantage

1. Introduction

2. The Mercantilist View on Trade

3. Law of Absolute Advantage

4. Law of Comparative Advantage

5. Comparative Advantage and Opportunity Costs

6. The Basis for and Gains from International Trade



The Standard Theory of International Trade

The Production Frontier with Increasing Costs; Community Indifference Curves; Equilibrium in Isolation; The Basis for and Gains from Trade with Increasing Costs; Trade Based on Differences in Tastes



Demand and Supply, Offer Curves, and the Terms of Trade

The Equilibrium-Relative Commodity Price with Trade-Partial Equilibrium Analysis; Offer Curves; The Equilibrium-Relative Commodity Price with Trade-General Equilibrium Analysis; The Terms of Trade



Factor Endowments and the Heckscher Ohlin Theory

Assumptions of the Theory; Factor Intensity, Factor Abundance, and the Shape of the Production Frontier; Factor Endowment and the Heckscher Ohlin Theory; Empirical Tests of Heckscher Ohlin Theory



International Trade Policy-Tariffs

Partial Equilibrium Analysis of a Tariff ; The Theory of Tariff Structure; General Equilibrium Analysis of a Tariff in a Small Country; General Equilibrium Analysis of a Tariff in a Large Country; The Optimum Tariff



International Trade Policy: Non-Tariff Trade Barriers

Import Quotas; Other Non Tariff Barriers and the New Protectionism



Balance of Payments of Pakistan

A Brief Review of BOP of Pakistan; Causes of Deficit in BOP of Pakistan and Remedial Measures to Correct it



Exchange Rate Determination

Purchasing Power Parity Theory; Monetary Approach to the Balance of Payments and Exchange Rates; Asset Market Model and Exchange Rates; Exchange Rate Dynamics



International Monetary System: Past, Present and Future

The Gold Standard and the Interwar Experience; The Breton Woods System; Operation and Evolution of the Bretoon Woods System; Collapse of the Bretton Woods System; International Monetary System: Present and Future