1. International Economics Introduction and Overview
1. Course Organization.
2. Overview of the World Economy
1. Elements of the World Economy
2. Ways Countries Interact
1. Trade
2. Capital Flows
3. Migration
3. Policies that Affect Others
4. Institutions
2. Comparative Advantage and the Gains from Trade
1. Why Countries Trade
1. Price Differences
2. Determinants of Prices
2. If All Prices Too High
1. Adjustment through exchange rate
2. Implication for pattern of trade
3. Adjustment through wage
3. Ricardian Model of Trade
1. Examples
1. With Absolute Advantage
2. With Comparative Advantage
2. Lessons of the Ricardian Model
4. Generality of the Gains from Trade
3. Factor Proportions and Trade
1. What Determines Comparative Advantage?
1. Definition
2. Sources
2. The Factor Proportions Model
1. Main Idea
2. Intuition
3. Supply and Demand
4. Does the Theory Work?
3. Effects of Trade
1. Summary of Effects
1. Changes in Production
2. Factor Price Equalization
2. Theoretical Illustration
4. The New Trade Theory
1. Assumptions Changed by New Trade Theory
1. Constant Returns to Scale
2. Perfect Competition
3. Homogeneous Products
2. Implications of the New Trade Theory
1. Intra-Industry Trade
2. Possible Loss from Trade with Scale Economies
3. New Sources of Gain from Trade
1. Scale Economies
2. Improved Competition
3. Variety
3. Rationales for Active Trade Policies
5. Tariffs
1. What Are They?
2. Who Uses Them?
3. Effects of Tariffs
1. Small Country Case
2. Large Country Case
3. Size of the Effects
4. Why Countries Use Tariffs
1. Direct Reasons
1. Revenue
2. Protection of Firms
3. Protection of Workers
2. Why Tariffs Are "Second Best"
3. Why Tariffs Are Used Anyway
6. Preferential Trading Arrangements
1. What Are PTAs?
2. Examples
1. European Union (EU)
2. North American Free Trade Agreement (NAFTA)
3. Effects of PTAs
1. Not the Same as Free Trade
1. Trade Creation
2. Trade Diversion
2. Market Illustration
4. NAFTA
1. History
2. Analysis Beforehand
3. Evaluation Afterward
7. Nontariff Barriers
1. What Are NTBs?
2. Main Types
1. Quotas
2. Voluntary Export Restraints (VERs)
3. Government Procurement Regulations
4. Customs Procedures
5. Standards
6. Local Content Requirements
7. Unfair Trade Laws
3. Effects of Quotas
1. Equivalent to a Tariff
2. Who Gets the Rents?
8. U.S. Trade Policies and Institutions
1. Parts of U.S. Government that Handle Trade
1. We do NOT have Trade Ministry
2. What We DO have
2. Main Features of U.S. Trade Policies
1. Tariffs, Quotas, VERs
2. Escape Clause
3. Unfair Trade Laws
4. Trade Adjustment Assistance
5. Fast Track
3. Trends in U.S. Trade Policy
1. Promote Global Freer Trade
2. Restrict Trade in Some Industries
3. Promote U.S. Exports
9. World Trade Arrangements and the WTO
1. International Organizations Related to Trade
1. WTO
2. OECD
3. EU, NAFTA, etc.
4. UN Organizations
2. World Trade Organization
1. History, as GATT
2. GATT Rounds
3. WTO Today
4. Functions
10. Migration
1. Why People Migrate
2. Why Wages Differ across Countries
1. Endowments
2. Technology
3. Other
4. Supply and Demand for Labor
3. Effects of Migration
1. On Payments to Factors
1. Labor
2. Other
2. Other Effects
4. Policies to Affect Migration
5. The U.S. Experience
11. Capital Movements and Multinationals
1. Terminology
1. FDI, DFI, MNEs, MNCs
2. Real Versus Financial Capital
2. Why Do Firms Invest Abroad?
1. What Are Their Options?
2. Necessary Conditions
3. Reasons for Producing Abroad
1. For Local Market
2. For Export
3. Who Gains and Who Loses?
1. Effects that are Similar to Trade
2. Effects that Differ from Trade
12. What Does the Balance of Trade Really Mean?
1. What is the Balance of Trade?
2. What Does the Balance of Trade Not Mean?
3. International Transactions
1. Current Account
2. Capital Account
4. What Does the Balance of Trade Really Mean?
1. From Balance of Payments Accounting
2. From National Income Accounting
13. Exchange Rates
1. In What Forms Are Exchange Rates Reported?
1. Bilateral Nominal Rates
2. Multilateral (Trade-Weighted) Rates
3. Real Rates
4. Forward Rates
2. What Determines Exchange Rates?
1. Markets
2. Governments/Central Banks
3. Theories of Exchange Rates
1. Purchasing Power Parity
2. Asset Theory
3. Supply and Demand Model
14. Pegging the Exchange Rate
1. How It1s Done
1. Market Intervention
2. Bands of Fluctuation
3. Hybrids of Pegged and Floating
2. Who Pegs?
3. Mechanics of Intervention
1. Reserves
2. Money Supply
3. Sterilization
4. Effects of Pegging
5. Pros and Cons of Pegging
1. Stability
2. Speculative Attack
15. Macro Policies In International Context
1. Recall How Macro Policies Work
1. Aggregate Supply and Demand
2. Monetary and Fiscal Policies
2. How International Markets Change Policy Effectiveness
3. Effects of Depreciation
1. Through Goods Markets
2. Through Asset Markets
4. Policies under Peg and Float
1. Monetary Policy
2. Fiscal Policy
5. Effects Across Countries