PART I: INTERNATIONAL TRADE THEORY
Week 1
Chapter 1: What Is International Economics About?
Chapter 2: World Trade: An Overview (include the Gravity Model)
Chapter 3: Labor Productivity and Comparative Advantage: The Ricardian Model
The Concept of Comparative Advantage
A One-Factor Economy
Trade in a One-Factor World
Misconceptions About Comparative Advantage
Box: Do Wages Reflect Productivity
Empirical Evidence on the Ricardian Model
Chapter 4: Resources, Comparative Advantage, and Income Distribution
Introduction to Specific Factors and Income Distribution
The Political Economy of Trade: A Preliminary View
International Labor Mobility
Case Study: Foreign Workers: The Story of the Gulf Cooperation Council
Chapter 5: Resources and Trade: The Heckscher-Ohlin Model
Introduction (p. 110)
Trade and Income Distribution and Factor Price Equilization (p. 121-134)
Read the Richard B. Freeman Article: "Are Your Wages Set in Beijing" Journal of Economic Perspectives, Vol. 9, n.3, Summer 1995.
Chapter 7: Economies of Scale, Imperfect Competition and International Trade
Economies of Scale and International Trade: An Overview
Economies of Scale and Market Structure
The Theory of External Economies
External Economies and International Trade
Box: Tinseltown Economics
Week 2
Tuesday First Exam Chapters 1, 2, 3, 4, 5, 7
PART II: INTERNATIONAL TRADE POLICY
Chapter 8: Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises
Trade Costs and Export Decisions
Dumping
Multinationals and Outsourcing
Chapter 9: The Instruments of Trade Policy
Basic Tariff Analysis
Costs and Benefits of a Tariff
Other Instruments of Trade Policy
Case Study: Europe's Common Agricultural Policy
Case Study: An Import Quota in Practice: US Sugar
The Effects of Tariff Policy: A Summary
Chapter 10: The Political Economy of Trade Policy
The Case for Free Trade
Case Study: The Gains from 1992
Income Distribution and Trade Policy
International Negotiations and Trade Policy
Chapter 11: Trade Policy in Developing Countries
Import-substituting industrialization
Trade Liberalization Since 1985
Trade and Growth: Takeoff in Asia
Chapter 12: Controversies in Trade Policy
Globalization and Low-Wage Labor
Globalization and the Environment
PART III: EXCHANGE RATES AND OPEN ECONOMY MACROECONOMICS
Chapter 13: National Income Accounting and the Balance of Payments
The National Income Accounts
National Income Accounting for an Open Economy
Case Study: Government Budget Reduction May Not Increase the CA Surplus
The Balance of Payments Accounts
Case Study: The Assets and Liabilities of World's Biggest Debtor
Week 3
Tuesday, Second Exam: Chapters 8, 9, 10, 11, 12
Chapter 14: Exchange Rates and the Foreign Exchange Market: An Asset Approach
Exchange Rates and International Transactions
The Foreign Exchange Market
The Demand for Foreign Currency Assets
Equilibrium in the Foreign Exchange Market
Interest Rates, Expectations, and Equilibrium
Chapter 15 Money, Interest Rates, and Exchange Rates
Money Defined: A Brief Review
The Equilibrium Interest Rate: The Interaction of Money Supply and Demand
The Money Supply and Exchange Rate in the Short Run
Chapter 16: Price Levels and the Exchange Rate in the Long Run
The Law of One Price
Purchasing Power Parity
Empirical Evidence on PPP and the Law of One Price
Explaining the Problems with PPP
Box: Some Meaty Evidence on the Law of One Price
Chapter 17: Output and the Exchange Rate in the Short Run
Determinants of Aggregate Demand in an Open Economy
The Equation of Aggregate Demand
How Output Is Determined in the Short Run
Output Market Equilibrium in the Short Run: the DD Schedule
Asset Market Equilibrium in the Short Run: the AA Schedule
Short Run Equilibrium for an Open Economy
Temporary Changes in Monetary and Fiscal Policy
Macroeconomic Policies and the Current Account
Gradual Trade Flow Adjustments and Current Account Dynamics
Week 4
Tuesday Third Exam Chapters 13, 14, 15, 16, 17
Chapter 18: Fixed Exchange Rates and Foreign Exchange Intervention
Why Study Fixed Exchange Rates?
Central Bank Intervention and the Money Supply
How the Central Bank Fixes the Exchange Rate
Stabilization Policies with a Fixed Exchange Rate
Balance of Payments Crises and Capital Flight
Reserve Currencies in the World Monetary System
The Gold Standard
Chapter 19: The International Monetary System, 1870-1973
Macroeconomic Policy Goals in an Open Economy
International Macroeconomic Policy under the Gold Standard, 1870-1914
Box: Hume versus the Mercantilists
The Interwar Years, 1918-1939
Case Study: The International\Gold Standard and the Great Depression
The Bretton Woods System and the International Monetary Fund
The External Balance Problem of the United States
Case Study: The Decline and Fall of the Bretton Woods System
Worldwide Inflation and the Transition to Floating Rates
Chapter 20: Optimum Currency Areas and the European Experience
Week 5:
PART IV: INTERNATIONAL MACROECONOMIC POLICY
Chapter 21: Financial Globalization: Opportunities and Crisis
Chapter 22: Developing Countries: Growth, Crisis and Reform
Income, Wealth and Growth in the World Economy
Structural Features of Developing Countries
Developing-Country Borrowing and Debt
Box: Simple Algebra of Moral Hazard
Box: What Did Asia Do Right?
Lessons of Developing-Country Cases
Reforming the Financial "Architecture"
Understanding Global Capital Flows and Global Distribution of Income
Student Presentations – Wednesday and Thursday.
Exam 4 Friday, Chapters 18, 19, 20, 21, 22.