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Gain from trade when prices are distorted?

Abbreviated Question: 
Gain from trade when prices are distorted?
Answer: 

Indeed, one answer to a fundamental question in international trade -- why do countries trade? -- is that specialization based on comparative advantage leads to gains from trade for all countries. This same principle also applies at the individual level: I completely specialize in producing and selling educational “goods”, and I buy everything else from others. And I am better off relative to being self-sufficient -- producing everything myself. Gains from trade! 

CARD: Ceasing China trade's short-term effects

September 27, 2017

Several members of CARD were quoted in an Iowa State Daily article about the potential effects on US agriculture in the case of cessation of US trade with China.

“Ceasing trade with China would have a major short-term impact on agricultural markets. China is one of our top two markets, going back and forth with Canada, with a rough value of $20 billion per year in ag trade,” Hart said. Read more about CARD: Ceasing China trade's short-term effects

Why would a low savings rate put downward pressure on interest rates?

Abbreviated Question: 
Why would a low savings rate put downward pressure on interest rates?
Answer: 

To a certain extent, the quoted sentence is tautological.

As an accounting identity, from the GNP accounts, the Balance of Trade (positive is a surplus) = (Savings – Investment) + (Taxes – Government Spending)

Hence, a balance of trade deficit, by definition, means savings is low relative to investment, or taxes are low relative to government spending (or both)

As an identity from the balance of payment accounts: [Balance of Trade Surplus + Capital Account Surplus] = 0 (assuming no government intervention)

William H Meyers

Dr. William Meyers
Retired Faculty
Emeritus Professor
Area of Expertise: 
International Economics

Harvey E Lapan

Dr. Harvey Lapan
Retired Faculty
Emeritus Professor
Area of Expertise: 
International Economics
Microeconomics
Finance

Dr. Dermot J Hayes

Dermot Hayes
Faculty
Professor
Pioneer Chair in Agribusiness
Charles F. Curtiss Distinguished Professor in Agriculture and Life Sciences
Area of Expertise: 
Finance
International Economics

Dr. Amani Elobeid

Dr. Amani Elobeid
Faculty
Teaching Professor
Deiter Endowed Chair for Sustaining Excellence in Agricultural Business
Area of Expertise: 
General Economics and Teaching
Agricultural Economics
International Economics

John C Beghin

Dr. John Beghin
Retired Faculty
Emeritus Professor
Area of Expertise: 
Agricultural and Natural Resource Economics
International Economics