S1213 International Trade, European Regionalism and Trade as Development Policy (S1213)

In this course we will start with the development of the basis of trade: comparative and absolute advantage, partial and general equilibrium analysis, the Heckscher-Olin model and intra-industry trade. We will explore the determination of the terms of trade, the process of factor price equalization, the implications for winners and losers and government policy. This will lead us into a discussion of protectionism, on the one hand, and integration on the other. Under the topic of regionalism we will discuss the EU in great detail. We will cover the topics of broadening vrs. deepening, the discussion regarding Europe as an optimum currency area (or not), the role of fiscal institutions, the Greek debt crisis, etc. Finally, we will explore the impact of trade on growth and develop and review development policy as it relates to liberalization and European expansion. To fully explore the topics covered in this course the student should have the equivalent of microeconomic and macroeconomic principles.

Teaching and Evaluation Methods:
We will have 3 exams including the final. The first exam will consist of T/F explain statements; the 2nd exam will consist of 3-4 "big think" essays; the final will consist of both forms of examination. Each exam will count 20% each. If you miss exam 1 (the easiest), or 2 you will make up the missed percentage by reweighting it to the final. The final is comprehensive and is NOT optional. Attendance and participation will contribute 5% to your grade and the class presentation will contribute 10%. The remaining 25% of your grade will come from an 8 page paper that you will write based on the prompt below.

 

All written assignments will be evaluated for both content and form. Generally, papers in economics start with an introduction and review of the relevant literature in order to capture the reader's interest and place the topic. Next, the research will outline the key points, theoretical issues, mechanism, etc. surrounding the debate. The model, methodology and/or data sections follow. The theoretical solutions will then be derived or the empirical results presented. This will be followed by a discussion of the findings. The conclusion will summarize the work and point out directions for further work, related issues, etc. Your written assignment will deviate from this format in the sense that there will be no modeling or data/methodology section. Instead you will jump to your conclusions based on the evidence and research you bring to bear on the topic.

 

I will assign or you will choose a topic from the list at the back of the syllabus for an individual, pair or group of students to present in class (the topic choice will determine how many students can work together as some are more difficult and dense than others). The presentation will be worth 10% of your grade. The student(s) will prepare a summary of the topic and teaching points which they will turn in after they "teach" their material to the class.

 

Prompt: Discuss the implications of conventional trade but more importantly the multinationalization of the firm, outsourcing and intra industry trade on factor price equalization. Due at the last day of class.

 

Topics for group or individual presentations- this will be assigned on a first come, first served basis. The articles and topics are listed in the order they appear on the syllabus:

-Exchange rate Pass Through- under #1.
Have US import prices become less responsive to changes in the dollar?
Does a fall in the dollar mean higher US consumer prices?

-Trade and the Global Environment- under #3 (this should be at least 2 people)

 

-Immigration- under #2 & 4
The Pro-Trade Effects of Immigration
A Hechscher-Olin-Samuelson Model of Immigration and Capital Transfers

 

- International Labor and Capital Flows: complements or Substitutes?

 

- The Increasing Returns to Scale Revolution in Trade and Geography

 

- Offshoring in a Knowledge Economy

 

- Counterfeit- Product Trade

 

- Why are Some People (and countries) more Protectionistic than Others?

 

- UE Integration- under #8
On the extent of Economic Integration: A comparison of EU countries and
the US States.
How deep is the connection between Turkish and European Union Countries?

 

- European Migration- under #8
European Migration: Welfare Migration or Economic Migration?

 

- European fiscal policy- under #8
Fiscal Sustainability and policy implications for the Euro Area.

 

- Trade Policy and Economic Development: How We Learn.

 

- Why Poor Countries don't Catch Up.