Текст 12 Quotas

Quotas are restrictions on the maximum quantity of imports. For example, the government might restrict the level of imports of Japanese cars to a maximum of 100000 cars a year. Although quotas restrict the quantity of imports, this does not mean they have no effect on domestic prices of the restricted goods. With a lower supply, the equilibrium price will be higher than under free trade.

Thus quotas are rather like tariffs. The domestic price to the consumer is increased, and it is this higher price that allows inefficient domestic producers to produce a higher output than under free trade. Quotas lead to social waste for exactly the same reasons as tariffs.

Because quotas raise the domestic price of the restricted good, the lucky foreign suppliers who succeed in getting some of their goods sold will make large profits on these sales. In terms of Figure 32-4, the rectangle EFHI, which would have accrued to the government as revenue from a tariff, now accrues to foreign suppliers or domestic importers. It represents the difference between domestic and world prices on the goods that are imported, multiplied by the quantity of imports allowed.

If these profits accrue to foreigners they represent a net social cost of quotas over and above the costs of imposing an equivalent tariff However, the government could always auction off licenses to import and so recoup this revenue. Private importers or foreign suppliers would be prepared to bid up to this amount to get their hands on an important license.

Текст 13 Purchasing Power Parity

Taking 1974 as 100, by 1988 the price of US goods had risen to 240 but the price of UK goods had risen to 312. If the nominal value of the exchange rate between US dollars and sterling had remained constant, UK international competitiveness would have fallen dramatically compared .with that of the United States.

International competitiveness is measured by comparing the relative prices of the goods from different countries when these are measured in л common currency. Thus, if the nominal $/£ exchange rate had remained constant during 1974—88, the UK would have become 30 per cent less competitive against the United States because UK prices rose 30 per cent more than those in the United States. Suppose, however, that the $/£ exchange rate had fallen 30 per cent over the same period. The $ price of UK exports would then have risen at the same rate as US prices, and the £ price of US exports would have risen at the same rate as UK prices. Competitiveness would have been unaltered.

The purchasing power parity path for the nominal exchange rates is the path that would maintain the level of international competitiveness constant over time. Countries with higher domestic inflation than their competitors would face a depreciating nominal exchange rate and countries with lower inflation than their competitors would face an appreciating exchange rate.

Under a regime of fixed nominal exchange rates, a single country cannot have higher domestic inflation than its competitors forever. Gradually it be comes less and less competitive in international trade, and is likely to face an increasing balance of trade deficit and a lower level of aggregate demand since net exports are negative. However, under flexible exchange rates it is possible that different countries can maintain different domestic inflation rates indefinitely. If countries with high inflation rates simultaneously face depreciating exchange т rates, it is possible that purchasing power parity (will be maintained and their international] competitiveness will be unaffected.