ECN230 · The Economics of International Trade

   Course description and lecture plan (autumn 2018):

               Course description  [kursbeskrivelse]            Lecture plan and schedule [kursplan]  

Session / date

Description of Lecture Topic

Lecture Outline

Reading Assignment

Handouts, Slides and Problem Set Assignments

 Part 1.Theoretical Background and Specification of Trade Models

1

06.09

Introduction to course and course objectives

Section 1: Intro to international economics; 1.1 Economic theory; 1.2 General trends; 1.3 Motivation for trade

Section 2: Partial equilibrium trade modeling; 2.1 Analyzing international trade

Outline 1

AFC: ch 1

 

 

AFC: ch 14 (p. 279-81)

 

 

3-panel diagram

Exercise: assignment 1

Set 1        Set 2

Set 3        Set 4

Slides: session-1

07.09

Exercise session: Group work to complete assignment 1 – instructor available. Download the set that refers to your group number.

2

13.09

Review assignment 1.

Section 2: Partial equilibrium trade modeling;

Section 3: Ricardian general equilibrium model; 3.1 Contributions from Smith to Ricardo; 3.2 Specification of the Ricardian model; 3.3 Present 2 x 2 x 1 trade model

Outline 2

AFC: ch 2-3

SRP1

2 x 2 x 1 model

Article on trade

3

14.09

Section 3.4-3.9: Ricardian 2x2x1 model; Law of one price, terms of trade; gains from trade; implications of preferences / country size; Conclude Ricardian model;

Section 4. Heckscher-Ohlin-(Samuelson) 2x2x2 model

Outline 3

AFC: ch 2-4

2 x 2 x 1 model

4

20.09

Section 4: H-O-S model; 4.1 Specification of the H-O-S 2 x 2 x 2 model; 4.2 Assumptions of the model; 4.3 - 4.11 Construct of the model; 4.12 Graphical representation

Outline 4

AFC: ch 5

Exercise: assignment 2

Set 1         Set 2

Set 3         Set 4

21.09

Exercise session: Group work to complete assignment 1 – instructor available. Download the set that refers to your group number.

5

27.09

Review assignment 2.

Section 4: H-O-S general equilibrium trade model 4.12 Graphical representation of trade in large-country case and different preferences; TOT and changes in TOT; Section 5. Theory of factor markets; 5.1-5.5 Marginal product (MP) of labor and wages; factor market equilibrium and mobility; changes in relative prices from trade

Outline 5

AFC: ch 5-6

2 x 2 x 2 model

6

28.10

Section 5: Output prices, input prices and factor re-allocation; SRP readings on trade and wages;

Outline 6

AFC: ch 8-9

SRP1

 Slides: sessions_6-7

7

04.10

Section 6: Summary of H-O-S model: theorems, expectations and limitations; Section 7: Economic growth; growth and sectors, production, consumption and trade

In-class group exercise: Scenario analysis

Outline 7-9

AFC: ch 11

 

Growth & trade

 

8

05.10

Section 7: Growth and large country effects; Section 8: Prebisch-Singer Hypothesis; 8.1  Dependency theory; 8.2 Proposition 1; 8.3 Proposition 2; 8.4 Counter-arguments to dependency theory

AFC: ch 11, 18;  SRP1;  RR1: Lutz

 Slides: sessions_8-9

9

11.10

Section 8.4: Counter-arguments continued; 8.5 Outward-oriented ag-export led growth or import substitution through manufacturing; Section 9: Role of government and investment; Introduce offer curves

SRP1:

RR1: Segerstrom; Maxwell&Fernando

 

 Part 2. Trade Policy, Imperfect Competition, Economies of Scale and Factor Mobility

10

12.10

Section 1: Offer curve analysis; Section 2: Welfare analysis; Section 3.1-3.5: Trade policy analysis: import tariffs

Outline 10

AFC: ch 7, 16 (p. 357);

 

SRP2

 Exercise: assignment 3

Set 1     Set 2

Set 3     Set 4

18.10

Exercise session: Group work to complete assignment 3 – instructor available. Download the set that refers to your group number.

11

19.10

Review assignment 3.

Conclude tariffs; Section 4.1-4.4: Trade policy analysis: import and export quotas

 

Outline 11-12

AFC: ch 13-14;      RR2: Houck, ch 5; Tweeten, ch 4

Slides: sessions 10-12

 

 

 

 

 

 

 

Exercise: assignment 4

 

Set 1        Set 2

 

Set 3        Set 4

12

25.10

Section 4.5: Tariff-quota non-equivalence; Section 5: Trade policy analysis of an export tax; Lerner symmetry; Section 6.1-6.5: Trade policy analysis of an export subsidy

AFC: ch 14-15       RR2: Houck, ch 5; Tweeten, ch 4

 

SRP2

 

Case-study: Rare-earth-elements

26.10

Exercise session: Group work to complete assignment 4 – instructor available. Download the set that refers to your group number.

13

01.11

Review assignment 4.

Conclude export subsidies and summarize trade policy; Section 7: Government intervention, trade policy and strategy (case for and against free trade/intervention)

Outline 13-15

AFC: ch 14-15       RR2: Houck, ch 5; Tweeten, ch 4

 

14

02.11

Section 7: Case for policy intervention, continued; Section 8.1-8.2: Policy intervention in developing countries; Asian miracle and trade’s role

AFC: ch 15, 18     

 

SRP2

 

Case-study:_US-EU sugar policy

15

08.11

Section 8.2-8.3: Asian miracle, and the financial crisis (implications of an export-led growth strategy); Strategies in mature economies

AFC: ch 15, 18   

RR2: Tweeten, ch 4 

SRP2

Case-study:_Middle-income trap 

 Slides: sessions_14-16

16

09.11

Section 9.1-9.3: Imperfectly competitive trade; causes of imperfect competition; monopoly and trade; Section 10: Imperfect competition and economies of scale

Outline 16-18

AFC: ch 15-16

SRP2

Case-study: Aircraft duopoly

Imperfect competition & trade

17

15.11

Section 11.1-11.4. International factor mobility, labor and capital

 

Slides: sessions 17-18

18

16.11

Section 11.5: international factor mobility, EOS and Section 12: Firm’s choice of and internationalization strategy

 In-class group exercise: Scenario analysis

AFC: ch 10, 12

SRP2

Internationalization strategy: Export vs FDI

19

06.12

Review session

 

Date is tentative – to be agreed upon

 

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