International Economics

Dominick Salvatore is Distinguished Professor of Economics at Fordham University, where he has taught for over 30 years. He is the author of numerous influential textbooks and has advised governments and international organizations on trade and development policy worldwide. Ralf Hepp is Associate Professor of Economics at Fordham University. His research focuses on international macroeconomics, exchange rates, and monetary policy.

• 1 Introduction 1Part 1 International Trade Theory2 The Law of Comparative Advantage 293 The Standard Theory of International Trade 534 Demand and Supply, Offer Curves, and the Terms of Trade 795 Factor Endowments and the Heckscher–Ohlin Theory 1016 Economies of Scale, Imperfect Competition, and International Trade 1427 Economic Growth and International Trade 172Part 2 International Trade Policy8 Trade Restrictions: Tariffs 2019 Nontariff Trade Barriers and the New Protectionism 23310 Economic Integration: Customs Unions and Free Trade Areas 27311 International Trade and Economic Development 30112 International Resource Movements and Multinational Corporations 331Part 3 The Balance of Payments, Foreign Exchange Markets, and Exchange Rates13 Balance of Payments 36314 Foreign Exchange Markets and Exchange Rates 38215 Exchange Rate Determination 417Part 4 Open-economy Macroeconomics and the International Monetary System16 The Price Adjustment Mechanism with Flexible and Fixed Exchange Rates 45317 The Income Adjustment Mechanism and Synthesis of Automatic Adjustments 48118 Open-Economy Macroeconomics: Adjustment Policies 50819 Prices and Output in an Open Economy: Aggregate Demand and Aggregate Supply 54620 Flexible Versus Fixed Exchange Rates, the European Monetary System, and Macroeconomic Policy Coordination 57121 The International Monetary System: Past, Present, and Future 606Answers to Selected Problems Glossary of Key Terms G- 1Name Index I- 1Subject Index I- 1