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1. In trade policy, this refers to special advantages, such as lower-than-MFN tariffs, accorded to another country's exports, usually in order to promote that country's development. See GSP. 2. In trade theory, this refers to the attitudes of consumers toward different goods, as represented by a utility function. Some propositions in trade theory use the assumption of identical and/or homothetic preferences.
Industry:Economy
A tariff lower than the MFN tariff, levied against imports from a country that is being given favored treatment, as in a preferential trading arrangement or under the GSP.
Industry:Economy
1. A group of countries that levy lower (or zero) tariffs against imports from members than outsiders. Includes FTAs, customs unions, and common markets. Encouragement to use this term instead of the more misleading FTA has come from Jagdish Bhagwati, as in Bhagwati and Panagariya (1996). 2. Frankel (1997) uses PTA for an arrangement where internal tariffs are reduced but not zero, reserving FTA for a trading bloc with zero internal tariffs.
Industry:Economy
A government-imposed upper limit on the price that may be charged for a product. If that limit is binding, it implies a situation of excess demand and shortage.
Industry:Economy
A method of defining relative factor abundance based on ratios of factor prices in autarky: Compared to country ''B'', country ''A'' is abundant in factor ''X'' relative to factor Y iff ''w<sub>X</sub><sup>A</sup>/w<sub>Y</sub><sup>A</sup> < w<sub>X</sub><sup>B</sup>/w<sub>Y</sub><sup>B</sup>'', where ''w<sub>I</sub><sup>J</sup>'' is the autarky price of factor ''I'' in country ''J'', ''I=X,Y, J=A,B''. This is also known as the "Ohlin definition," since it is the one used by Ohlin (1933).
Industry:Economy
A government-imposed lower limit on the price that may be charged for a product. If that limit is binding, it implies a situation of excess supply, which the government may need to purchase itself to keep price from falling.
Industry:Economy
A measure of the average prices of a group of goods relative to a base year. A typical price index for a vector of quantities ''q'' and prices ''p<sup>b</sup>'', ''p<sup>g</sup>'' in the base and given years respectively would be ''I'' = 100''p<sup>g</sup>q'' / ''p<sup>b</sup>q''.
Industry:Economy
A straight line representing the combinations of variables, usually two goods, that cost the same at some given prices. The slope of a price line measures relative prices, and changes in prices can therefore be represented by changing the slope of, or rotating, a price line. A steeper line means a higher relative price of the good measured on the horizontal axis.
Industry:Economy
1. Intervention in a market in order to reduce fluctuations in price. This has sometimes been attempted by means of a buffer stock in markets for primary products. 2. The use of macroeconomic policies to reduce inflation.
Industry:Economy
