- Students will learn why nations trade, what they trade, and who gains from this trade. We examine the role played by multinational firms. We then analyze the motives for countries or organizations to restrict or regulate international trade and study the effects of such policies on economic welfare.
- Know how to apply modern concepts to better understand the problems international economists study: the structure and volume of trade flows, gains from trade, trade policy issues.
- Explain how the modern models of international economics are developed and used to study the relevant economic questions.
- IntroductionA brief description of the course and some facts about international trade (FT, Chapter 1)
- Comparative advantage in the Ricardian modelComparative advantage: how does international trade generate gains for countries? (FT, Chapter 2)
- Specific-factor modelHow does trade affect income across workers and stakeholders across industries? (FT, Chapter 3)
- Heckscher-Ohlin modelHow does trade affect returns to capital and income across different types of workers? (FT, Chapters 4 and 5)
- Migration, capital flows, and offshoringEffects of migration, capital flows across countries, and offshoring on wages and welfare. How does migration and capital flows affect workers and owners of capital in the source and destination countries? What is offshoring? How is offshoring different from earlier trends in globalization? (FT, Chapter 5 and 7)
- Increasing returns to scale and firms export decisionsDoes trade reduce monopoly power? What are the gains from increasing variety of consumption goods? Why free trade is Canada is less controversial than free trade with Mexico? (FT, Chapter 6 + additional lecture notes)
- Trade policy and political economy of trade policyWhat types of policies affect international trade and how? How trade policies of one country affect welfare in another? Why countries do not always maximize welfare? Why some interest groups are favored over others? (FT, Chapters 8 – 10)
- International trade agreementsWhat is the WTO and how does it work? How was NAFTA put in place? (FT, Chapter 11)
- Interim assessment (2 module)0.5 * Final exam + 0.05 * Home assignments + 0.05 * In class participation + 0.4 * Midterm exam
- Krugman, P. R., Obstfeld, M., & Melitz, M. J. (2015). International Economics: Theory and Policy, Global Edition (Vol. Tenth edition, global edition). Boston: Pearson. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=nlebk&AN=1419045
- Stern, R. (2017). Balance of Payments : Theory and Economic Policy (Vol. First edition). London: Routledge. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=nlebk&AN=1565159
- Takashi Negishi. (2014). Developments of International Trade Theory. Springer. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.spr.advjbe.978.4.431.54433.3