ECN 230 Tentative Schedule and Lecture Outline · Autumn 2006

Session

Topic and Material Covered in Outline

Reading Assignment

Part I. Theoretical Background and Specification of Trade Models

12.09

Introduction: overview of the course and objectives. Intro to international economics; trends and importance of trade; Why nations trade? assign HW1

A&F, ch 1; reading handouts

13.09

Section 1: Trade modeling: partial eqlbm (3-panel graph), general eqlbm: Ricardian 2 country, 2 good, 1 factor model; review HW 1; assign HW 2

Houck, ch 2, 4 (p 29-33)

19.09

Ricardian 2 x 2 x 1 model; Law of one price, terms of trade; gains from trade; importance of preferences; large country implications

20.09

Review HW 2; conclude Ricardian model; Introduce (H-O-S) Heckscher-Ohlin-Samuelson 2 country, 2 good, 2 factor trade model; assign HW 3

A&F, ch 5 (p 119-28), 4 (p 101-04); SRP (p 1)

26.09

H-O-S 2 x 2 x 2 model; general equilibrium efficiency in production, factor allocation and consumption; Gains from trade, costs of adjustment

A&F, ch 3 and appendix, 4, 5; SRP (2-13)

27.09

Review HW 3; Output prices, input prices and income distribution; factor markets; social policy and income distribution; trade and wages

A&F, ch 5 (128-49), A7.1 (p 232-33); SRP (p 14-16)

03.10

Trade and wages; global income distribution; Summarize H-O-S model: theorems, expectations, evidence, and limitations; Section 2: Economic growth: application of the H-O-S model

A&F, ch 7; SRP (p 17-22)

04.10

Growth: effect on production, consumption, trade, terms of trade and welfare; Prebisch-Singer Hypothesis and dependency theory

11.10

Agriculture trade as an engine of growth; comparative advantage, competitiveness, and role of gov't and investment

SRP (26-37)

Part II. Measuring the Effects of Trade Policy; Trade Strategy and Imperfect Competition

12.10

Part II. Offer curve analysis; assign HW 4

A&F, ch 8 (8.2b)

24.10

Section 1: Gov't intervention in ag markets, producer/consumer subsidy equivalents; Consumer/producer surplus; Trade policy: tariffs – definition, types, objectives

A&F, ch 8; Houck, ch 4; SRP (p 39-60)

25.10

Trade policy: Tariffs: welfare implications; small and large country implications; quotas – definition, types, welfare implications; small and

SRP (pp 41-60)

31.10

Review HW 4; quota: large country implications; VER, OMA; quota licensing/administration; assign HW 5

Houck, ch 5, 8; SRP (p 41-60); A&F, ch 9

01.11

Trade policy: tariff-quota comparisons; export tax – definition, types, welfare implications; Lerner symmetry; export subsidies – definition, types, welfare implications by size; discuss other export programs

Houck, ch 5, 12; SRP (p 41-60); A&F, ch 9

07.11

Review HW 5; conclude trade policy; Section 2: Market failure, case for and against free trade, gov't intervention and trade strategy in developing country

A&F, ch 9; Houck 9; SRP (p 41-63)

08.11

Trade policy and development strategies in developing countries; East Asian Miracle as a trade strategy; strategic trade policy by developed countries

A&F, ch 11; SRP (p 64-74)

14.11

Conclude government strategy; Economies of scale and trade implications: imperfect competition and trade implications of a firm's behavior

A&F, ch 11; 6; SRP (p 75-6)

15.11

Economies of scale and trade implications: product differentiation; International factor movements in the absence of EOS; EOS, product differentiation in the presence of international factor mobility

A&F, ch 12; SRP (77-84)

21.11

Internationalization strategy by a firm: export versus foreign investment, multinational corporations; arrange a review session (to be determined, TBA)

A&F, ch 12; SRP (77-44)

Conclude course and hold a review session.