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Dominican Republic struggles to find its “comparative advantage” as it faces...

FT.com / World / Americas – US economy threatens Dominican Republic Trade based on comparative advantage… the theory originally articulated by Adam Smith, later fine-tuned by David Ricardo, the theory...

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Big trouble in little China – how slowing growth may mean major problems for...

How high is China’s jobless rate? | The great wall of unemployed | The Economist China Faces Unemployment Woes Unemployment in China is a big deal. The legitimacy of the Chinese Communist Party hinges...

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The Marshall-Lerner Condition, the J-curve, and the US trade deficit

For a video lesson on the Marshall Lerner Condition and the J-curve, click here: The Marshall-Lerner Condition (HL Only) | The Economics Classroom Read the following article before reading the blog...

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Exchange rates, currency manipulations, and the balance of trade

FT.com | The Economists’ Forum | Imbalances and undervalued exchange rates: Rehabilitating Keynes In our year 2 IB Economics class, we are beginning the part of our International Trade unit on exchange...

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Another question from the Help Desk: Relative price levels as a determinant...

One feature of Economics in Plain English several students and teachers have found helpful over the years is the Econ Help Desk, where readers can get questions about basic economic concepts answered...

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Trade surpluses are not all they’re cracked up to be!

When teaching international trade to high school economics students, one of the challenges is understanding the pros and cons of trade surpluses and deficits. A country’s balance of trade refers to the...

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Yeah, we have a trade deficit, SO WHAT?!

The following is an excerpt from Chapter 22  – “Balance of Payments” of my soon to be published textbook “Pearson Baccalaureate Economics” If the total spending by a nation’s residents on goods and...

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Exchange rates and trade: a delicate balancing act, currently out of balance!

FT.com / Asia-Pacific – Renminbi at heart of trade imbalances. “The Americans get the toys, the Chinese get the Treasuries and we get screwed.” Thus a European Union official once characterised the...

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“A glimmer of hope”– rising incomes in China lead to rising demand for US...

A nation’s balance of payments measures all the transactions between the residents of that nation and the residents of foreign nations, including the flow of money for the purchase of goods and...

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If Iceland can get rich, anyone can!

CIA – The World Factbook – Iceland How did a barren rock in the middle of the North Atlantic Ocean become one of the richest countries in the world, where the average citizen earns $40,000 per year?...

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Excuse me, China… could you lend us another billion? Understanding the...

The $1.4 Trillion Question – James Fallows – the Atlantic American consumers are a curious bunch. Up until 2007, the average savings rate in the United States fell as low as 1%, and during brief period...

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The source of America’s trade deficit with China

I’m showing the PBS documentary, “Is Walmart Good for America?” to my AP Macroeconomics students today as we introduce the topic of trade balances. Discussion questions will be posted soon. Related...

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Planet Money Podcast –“China’s Giant Pool of Money”

NPR’s Planet Money team did a great podcast last week about China’s accumulation of US dollars from its large trade surplus with the United States. This story offers a great illustration of the...

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Lesson plan: Elasticity, exchange rates and the balance of payments –...

Related Unit: IB Economics Unit 4.7 – Balance of Payments (Unit 3.3 in the new IB Economics syllabus) Topic: The Marshall Lerner Condition and the J-Curve Learning Goals/Objectives: For students to...

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Current Account Balance analysis and questions

The table below shows the trade balances for the nations from which my year two IB Economics student come. They are ranked in order from the country whose trade deficit makes up the largest percentage...

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