1 Introduction 1
Part I International Trade Theory 9
2 Labor Productivity and Comparative Advantage:
The Ricardian Model 10
3 Specific Factors and Income Distribution 38
4 Resources and Trade: The Heckscher-Ohlin Model 67
5 The Standard Trade Model 93
6 Economies of Scale, Imperfect Competition,
and International Trade 120
7 International Factor Movements 160
Part 2 International Trade Policy 185
8 The Instruments of Trade Policy 186
9 The Political Economy of Trade Policy 218
10 Trade Policy in Developing Countries 255
11 Controversies in Trade Policy 276
Part 3 Exchange Rates and Open-Economy
Macroeconomics 293
12 National Income Accounting and the Balance of Payments 294
13 Exchange Rates and the Foreign Exchange Market:
An Asset Approach 324
14 Money, Interest Rates, and Exchange Rates 357
15 Price Levels and the Exchange Rate in the Long Run 388
16 Output and the Exchange Rate in the Short Run 433
17 Fixed Exchange Rates and Foreign Exchange Intervention 481
Part 4 International Macroeconomic Policy 53 I
18 The International Monetary System, 1870-1973 532
19 Macroeconomic Policy and Coordination under Floating
Exchange Rates 568
20 Optimum Currency Areas and the European Experience 604
21 The Global Capital Market: Performance
and Policy Problems 636
22 Developing Countries: Growth, Crisis, and Reform 665

Mathematical Postscripts 707
Postscript to Chapter 3: The Specific Factors Model 708
Postscript to Chapter 4: The Factor Proportions Model 714
Postscript to Chapter 5: The Trading World Economy 717
Postscript to Chapter 6: The Monopolistic
Competition Model 726
Postscript to Chapter 21: Risk Aversion and
International Portfolio Diversification 728
Index 737