1. C HAPTER 6 ECONOMICS OF SCALE, IMPERFECT COMPETITION, AND INTERNATIONAL TRADE

2. The Imitation Lag Hypothesis –The Imitation Lag Hypothesis Michael V. Posner(1961) Imitation lag-demand lag=net lag –The Product Cycle Theory Michael V. Posner(1966) A typical “new product”(F2) Dynamic comparative advantage Test: there should be a positive correlation between R&D expenditures and successful export performance by industry. Dinopoulos, Oehmker and Segerstrom(1993)

3. The trade pattern in the Product Cycle Theory time Production, consumpti on of product production consumption New product stage Maturing product stage Standardized product stage Exports Imports

4. The Linder Theory Staffan Burenstam Linder(1961) Demand-oriented Overlapping demand International trade in manufactured goods will be more intense between countries with similar per capita income levels than between countries with dissimilar per capita income levels. Tests: the greater the difference between the per capita incomes of country and its trading partner, the less intensely the two countries will trade with each other.

5. Overlapping Demands in the Linder Model Income levels Goods A B H G F E D C I Country 1’s income Country 1’s demand andproduction Country 2’s demand andproduction Country 2’s income

6. The Kemp Model Murray C. Kemp(1964) Economies of scale (external economies) and a convex PPF A multitude of trading possibilities

7. X Y

8. A Convex-to-the-Origin PPF X Y P X /P Y E G N M

9. The Convex PPF and Different Possible TOT X Y P X /P Y E F M N TOT 1 TOT 2 TOT 3 The existence of economies of scale generates considerable uncertainty concerning the production and trade pattern.

10. Q P,C D AC SWISS QSQS PSPS AC CHINA QCQC QCQC External Economics and Specialization

11. The Krugman Model Paul Krugman(1979) Economies of scale( internal to the firm) and monopolistic competition

12. Average Versus Marginal Cost

13. monopoly QMQM P D=AR MR MC PMPM AC

14. Monopolistic competition Q P D Toyota D MR MC QMQM PMPM

15. N P,C CC PP N1N1 N0N0 Equilibrium in a Monopolistically Competitive Market

16. N P,C CC PP N0N0 Effects of a Larger Market N1N1

17. 贸易前 A 国市场 贸易前 B 国 市场 贸易后一体化 市场 汽车总销售量 900 0001 600 0002 500 000 厂商数 6810 每个厂商销售量 150 000200 000250 000 平均成本 1 000875800 市场价格 1 000875800

18. Equilibrium in the Automobile Market

19. Trade in a World Without Increasing Returns

20. Trade With Increasing Returns and Monopolistic Competition

21. Other Post-H-O theories Reciprocal dumping model –Brander and Krugman(1983) Duopoly market –Trade in a homogeneous product –Positive welfare aspect: pro- competitive effect –Negative welfare aspect: waste

22. Dumping Q P D D F =MR F MR MC QTQT QDQD QFQF PFPF PDPD

23. Intra-Industry Trade –Reasons for IIT in Product Category Product differentiation Transport costs and geographical location Dynamic economies of scale Degree of product aggregation Differing income distributions in countries Differing factor endowments and product variety

24. The Level of a Country’s IIT Bela Balassa(1986)