Economic theory and mathematical modeling

At the same time, global aggregate demand is understood as the volume of production of goods that consumers are willing to collectively purchase at the existing price level inside and outside the country, and aggregate supply is understood as the volume of production of goods that producers are ready to offer on the market at the existing price level. On this basis, small countries are distinguished, those that cannot influence the change in the price of MR if they change their demand for any product, and vice versa, large countries. Small countries to make up for this weakness of theirs on ...

68. International trade. Foreign trade multiplier.

international trade(MT) - complex economic category, which can be considered at least in three aspects: organizational and technical, market and socio-economic.

Organizational and technical aspect studies physical exchange of goods and servicesbetween state-registered national economies (states). The main attention is paid to the problems associated with the purchase (sale) specific goods, their movement between counterparties (seller - buyer) and crossing state borders, with settlements, etc. These aspects of MT are studied by specific special (applied) disciplines - the organization and technique of foreign trade operations, customs, international financial and credit operations, international law(its various branches), accounting, etc.

Organizational and market aspectdefines MT ascombination of world demand and world supply, which materialize in two counter flows of goods and (or) services - world export (export) and world import (import). At the same time, the globalaggregate demandis understood as the volume of production of goods that consumers are willing to collectively purchase at the existing price level inside and outside the country, and the aggregate supply - as the volume of production of goods that producers are willing to offer on the market at the existing price level. They are usually considered only in value terms. The problems that arise in this case are mainly related to the study of the state of the market for specific goods (the ratio of supply and demand on it - the conjuncture), the optimal organization of commodity flows between countries, taking into account a wide variety of factors, but above all the price factor.

These problems are studied by international marketing and management, theories international trade and the world market, international monetary and financial relations.

Socio-economic aspectconsiders MT as a special typesocio-economic relationsarising between states in the process and about the exchange of goods and services. These relationships have a number of features that make them particularly important in the global economy.

First of all, it should be noted that they are global in nature, since all states and all their economic groupings are involved in them; they are an integrator, uniting national economies into a single world economy and internationalizing it, based on the international division of labor (MRI). MT determines what is more profitable for the state to produce and under what conditions to exchange the produced product. Thus, it contributes to the expansion and deepening of the MRT, and hence the MT, involving more and more new states in them. These relations are objective and universal, i.e. they exist independently of the will of one (group) person and are suitable for any state. They can organize world economy, placing the states depending on the development of foreign trade (BT) in it, on the share that it (BT) occupies in international trade, on the size of the average per capita foreign trade turnover. On this basis, "small" countries are distinguished - those that cannot influence the change in the price of MR if they change their demand for any product and, conversely, "large" countries. Small countries, in order to make up for this weakness in this or that market, often unite (integrate) and present aggregate demand and aggregate supply. But large countries can also unite, thus strengthening their position in the MT.

§6. Foreign trade multiplier.

The intensive development of foreign economic relations requires determining their impact on the development of the country's economy. Exports and imports, like other components of total spending, operate with a multiplier effect. Therefore, to quantify the impact of foreign trade on the growth of national income and GNP economic theory developed and uses in practice the model of foreign trade multiplier. A great contribution to its creation and development was made by D. Keynes, R. Kahn, F. Machlup, P. Samuelson and other economists.

The initial change in exports, like the change in investment, creates a chain reaction that decreases with each successive cycle. Gives the effect of multiplying the original change. Similarly to the investment multiplier, the export multiplier (Mx) is determined by internal processes in the sphere of consumption and can be defined through the marginal propensity to consume (MRC) or the marginal propensity to save (MRS):

Mx=1/MRS=1/(1—MRC)

The impact of an increase in exports on the volume of production is determined on the basis of the formula: GNP = MPX.

But international trade is not only exports, but also imports. And if a part of the received export income goes to imports, then the domestic purchasing power will decrease. Imports act as a drain, similar to savings (imports have a negative sign). Therefore, imports can be analyzed similarly to the savings function. With the introduction of the concept of marginal propensity to import (MRM), as the ratio of the change in the volume of imports to the change in income, the multiplier formula becomes:

Mp=1/((MRS-MRM)DX)

And the effect of a change in exports, taking into account imports, on a change in the volume of production can be described by the formula:

GNP=1/(MRS-MRM)DX

The effect of the foreign trade multiplier is not infinite. Multiplication has a fading character, the values ​​of the next increments are steadily declining, because the value of the marginal propensity to consume imported goods is less than one.

After a certain period of time, the perturbation caused by the increase in investment in one of the countries is smoothed out, the systems again come to a state of equilibrium. Big role in the elimination of the disturbed balance of the trade balance and obstacles to the development of international trade, it is called upon to play an active state regulation

For the economy, the effect of export and import production opportunities is important. If we turn to exports, we can easily see that the latter acts on income like investment or government spending. Export orders are accompanied by an increase in production, are reflected in the amount of family income, etc., i.e. export has a multiplier (multiplier) effect. Let's say that plant A received an order for export for 1 billion rubles. If the marginal propensity to consume is 3/4, workers will spend 3/4 of their income on consumer goods. In turn, workers who have manufactured consumer goods will also spend 3/4 of their additional income on increasing consumption, etc. The chain of economic interrelations in the economy will expand, increasing the effect of the initial income from exports. The export multiplier Mx is due to the processes taking place in the sphere of consumption, so the propensity to consume MRC, or the marginal propensity to save MRS, can be calculated using the formula
Mx = 1 / MRS = 1 / (1 - MRS).
It is also possible to calculate the impact of exports on the volume of production using the formula AVNP = Мр АХ. For our example, the multiplier will be 4.
Foreign trade is connected not only with exports, but also with imports. Society, as we have seen, has to constantly determine the ratio of export and import potential, taking into account that imports are also accompanied by the effect of the Mp multiplier. If we introduce the concept of marginal propensity to import and designate it as MRMt, then the multiplier formula will take the form
Mp = 1 / (MRS + MRM).
In turn, the effect of proactive exports on imports can be described by the formula
AVNP = 1 / (MRS + MRM) . OH.
If we assume that the marginal propensity to import is 1/4, then this part of the additional income will go to the purchase of imported goods, and the export multiplier, taking into account imports, will be:
Mp \u003d \ / (MRS + MRM) \u003d 1 / (1/4 + 1/4) \u003d 1/1/2 \u003d 2.
For the example taken, when an export order was made in the amount of 1 billion rubles, the increase in income, taking into account the propensity for imported products, will be equal to 2 billion rubles. Note that the export multiplier without imports was equal to 4, which means that the increase in income would be a figure equal to 4 billion rubles.

To ensure the implementation of trade and financial transactions between countries, a certain ratio is established between their national monetary units. The monetary unit of a country is called the national currency. The ratio of national currencies is called the exchange rate. The exchange rate is the price of the national currency of one country, expressed in the national currency of another country.

Exchange rate regimes

There are 2 exchange rate regimes: fixed and floating.

Fixed exchange rate. Under a fixed exchange rate regime, the exchange rate is set by the central bank at a fixed ratio, such as $2 to 1 pound, and maintained through central bank intervention. Central bank interventions are operations to buy and sell foreign currency in exchange for the national currency in order to maintain the exchange rate of the national currency at a constant level.

Flexible exchange rate. The system of flexible (flexible) or floating (floating) exchange rates assumes that exchange rates are regulated by the market mechanism and are set according to the ratio of supply and demand of currency in the foreign exchange market. Therefore, balancing the balance of payments occurs without the intervention (interventions) of the central bank and is carried out through the inflow or outflow of capital. The balance of payments equation is:

BP = Xn + CF = 0 or Xn = - CF

Foreign Trade Multiplier

Coefficient characterizing the impact of additional exports of goods and services, foreign investment on external income. Income thus increases to a greater extent than the export of goods, services and capital.

The initial change in exports, like the change in investment, creates a chain reaction that decreases with each successive cycle. Gives the effect of multiplying the original change. Similarly to the investment multiplier, the export multiplier (Mx) is driven by internal (consumption) processes and can be defined through marginal propensity to consume (MRC) or marginal propensity to save (MRS):

Mx=1/MRS=1/(1-MRC)

The impact of an increase in exports on the volume of production is determined on the basis of the formula: GNP \u003d Mp (X.

But international trade is not only exports, but also imports. And if a part of the received export income goes to imports, then the domestic purchasing power will decrease. Imports act as a drain, similar to savings (imports have a negative sign). Therefore, imports can be analyzed similarly to the savings function. With the introduction of the concept of marginal propensity to import (MRM), as the ratio of the change in the volume of imports to the change in income, the multiplier formula becomes:

Mp=1/((MRS-MRM)DX)

And the effect of a change in exports, taking into account imports, on a change in the volume of production can be described by the formula:

(GNP=1/(MRS-MRM)DX

The effect of the foreign trade multiplier is not infinite. Multiplication has a fading character, the values ​​of the next increments are steadily declining, because the value of the marginal propensity to consume imported goods is less than one.

After a certain period of time, the perturbation caused by the increase in investment in one of the countries is smoothed out, the systems again come to a state of equilibrium. Active state regulation is called upon to play an important role in eliminating the disturbed balance of the trade balance and obstacles to the development of international trade.

An open economy is the main link in the world economy. Derived from national economies in their origin and logic of analysis, international economic relations have a significant, and sometimes decisive, feedback effect on the economic policies of states.

According to Keynesian theory, the general equation for an open economy is as follows:

Y=С+J+G+(export-import),

where: Y - effective demand,

With- consumption,

J- investments,

G- state procurements.

Export expands effective demand by adding foreign sales of goods and services to domestic, while imports replace domestic consumption with alternative foreign products, i.e. opportunities domestic market decrease.

The openness of the economy complicates state economic regulation, reduces its efficiency, since external factors are connected to interdependence.

International comparisons show, for example, that the propensity to import was high in Switzerland and Great Britain in the 1960s and 1980s, but noticeably lower in the USA and Japan. The national income growth multiplier for these countries found an interesting sequence: Switzerland - 1.3; Great Britain - 1.4; US 3.2; Japan - 3.7.

To quantify the impact of foreign trade on the growth of national income and gross national product, economic theory has developed and uses in practice the model foreign trade multiplier.

The initial change in exports, like the change in investment, sets off a chain reaction, which, decreasing with each subsequent cycle, gives the effect of a multiple amplification of the initial change. Similar to the investment multiplier, the export multiplier (Mx) due to internal processes in the sphere of consumption and can be defined through the marginal propensity to consume (MRC) or marginal propensity to save (MRS) :

The impact of an increase in exports on the volume of production is determined on the basis of the formula: .

But international trade is not only exports, but also imports. And if we take into account that part of the received export income goes to imports, then domestic purchasing power will decrease. Imports act as a drain, similar to savings (imports have a negative sign). Therefore, imports can be analyzed similarly to the savings function. With the introduction of the concept of marginal propensity to import (MRM) as the ratio of the change in the volume of imports to the change in income, the multiplier formula takes the form:

And the effect of a change in exports, taking into account imports, on a change in the volume of production can be described by a formula.

In the previous paragraph, we analyzed the effect on national income of a change in investment or exports, essentially considering the volume of exports as a variable independent of national income.

However, if the assumption that there is no direct and immediate relationship between income and exports is generally correct, then the existence of an indirect relationship between these quantities cannot be denied. Indeed, when the income of a given country increases, its imports also increase, and since these imports are exports to other countries, the income of these latter increases. But the growth of national income in other countries causes an expansion of imports and, therefore, at least in part, an increase in the exports of the first country.

The existence of a relationship between the change in national income and the change in exports greatly complicates the formula for the foreign trade multiplier (this is the name of the multiplier of the simplified Keynesian model, which includes variables related to foreign trade).

To simplify our reasoning, consider the case where there are only two countries, A and B.

The conditions for the equilibrium of income, or the equations for determining the level of income in these two countries, are expressed as follows:

Y a \u003d aA "b SAUD + 1a + XA ~~ 1a -

Y in "av sv ^ in + / in + - / d - t ^ U in *

When country A has an autonomous change in investment equal to A/l, we have:

A UA \u003d sA kU d + A / d + &XA - tA A UA,

AG in \u003d c in A Y in + - TV LU in

But we know that country A's imports are equal to "country B's" exports, and vice versa, so

AXA = TV BYV and &XV = TAKUA.

Replacing these quantities in the expressions written above, we obtain

YGA \u003d LUA + D1A + tv DUv - ta DU „, (IV. 3) & Uv - svUv + ta & UA - tvAUv. (IV.4)

On the other hand, from (IV. 4) it can be seen that

d \u003d - 4 - A UA,

and equation (IV. 3) is transformed as follows,

L/. t. - ta ’

~-g A ~ g - + tl A 1 -sv + tv A

which is the expression of the foreign trade multiplier.

It is clear from this expression that the amount of change in income of country A caused by a change in investment depends not only on the marginal propensities to consume and to import of country L, but also on the marginal propensities to consume and import of country B.

It should also be noted that the value of the foreign trade multiplier is greater than the value of the multiplier-* torus given in the previous paragraph, since

it includes a new term, which is negated

is integer and therefore reduces the value of the denominator.

The action of the foreign trade multiplier can be explained as follows: an increase in investment in country A causes, first of all, an increase in income in it as a result of a normal multiplier process, but as the national income of the country grows

A also increases the volume of its imports, and since the imports of country A are also exports of country B, the national income of this latter also increases. In turn, an increase in the national income of country B causes an increase in its imports, and since it is also the export of country A, this again leads to an increase in the income of country A.

But this chain of cumulative effects on the national income of countries A and B is not endless.

Indeed, an increase in income in one country causes an increase in imports and, consequently, in income in another, but the magnitude of the increase decreases all the time due to the fact that the marginal propensity to import (and, of course, the marginal propensity to consume) is less than one.

It may be helpful to illustrate this with a numerical example. Let's assume that:

at the initial moment, the national incomes of two countries A and B are in equilibrium;

these two countries have not yet had trade relations;

the marginal propensities to consume and to import are respectively 0.75 and 0.25 for country A and 0.8 and 0.2 for country B, so the respective multipliers (excluding indirect effects) are

for country A and 2.5 for country B;

every time one of the two countries changes the amount of autonomous spending (investment or export), the multiplier process (excluding indirect effects) immediately makes itself felt in the sense that income immediately reaches the equilibrium level.

Let there be an increase in investment in country A of 100. Income A increases by 200 and imports of 50 units are carried out. Importing 50 units to A means exporting 50 units from B. As a result of exporting 50 units, the income of country B changes by 125 units and B in turn imports 25 units. But B's imports are equal to A's exports, so country A's income changes again by 50 units and its imports by 12.5 units. This process continues further, as shown in Table. 21, the construction of which, as it seems to us, is quite obvious. Period Indicator 6.25

If we sum up the changes in the income of country A at all six considered stages, we get a result of 266.58, which is almost equal to the result that we could get by multiplying the investment increment by the foreign trade multiplier:

AUl \u003d 0.2 x 0.25 ' ^ 0 \u003d 266.6.

As for the change in the income of country B, then, summing the increments in the same six stages, we get the value of 166.57. From the multiplier formula we get

where 50 is the value of B's ​​exports in the first period, which was autonomous in relation to B's income.

From this, an important aspect of the relationship between economic systems different states: the level of income of each of the countries participating in international trade is positively related to the level of income of the countries with which they trade.

If, for the further development of our analysis, we use instead of the simplified Keynesian model

his complete model, then in addition to the interdependencies between income increments, we can also establish other types of relationships determined by differences in price levels.

Indeed, if a given country's exports, say A, exceed its imports, that country's real income rises, but, as a rule, the general price level also rises. This growth is greater the closer the level of production is to the level of full employment. If inflationary trends are found in country A, the demand for imports in this country, due to the depreciation of the exchange rate, will increase faster than if these trends were not observed. And since the imports of A are equal to the exports of B, the national income of the latter increases more significantly (than otherwise), and with it the price level increases more significantly. As a result, there is a strong increase in imports, which further increases the inflationary tendency in L, etc.

It should be noted, incidentally, that reciprocal inflationary incentives arising from exports and hence from the demand for goods, as a rule, are accompanied by an increase in the cost of imported factors of production, which also contributes to the development of inflationary trends.

In essence, international trade is thus not only a means of transmitting changes in income and employment from one country to another, but also a means of propagating inflation.