- Jan 5: International Economics Introduction and Overview
- Course Organization.
- Overview of the World Economy
- Elements of the World Economy
- Ways Countries Interact
- Trade
- Capital Flows
- Migration
- Policies that Affect Others
- Institutions
- Jan 10: Comparative Advantage and the Gains from Trade
- Why Countries Trade
- Price Differences
- Determinants of Prices
- If All Prices Too High
- Adjustment through exchange rate
- Implication for pattern of trade
- Ricardian Model of Trade
- Examples
- With Absolute Advantage
- With Comparative Advantage
- Lessons of the Ricardian Model
- Jan 12: Factor Proportions and Trade
- What Determines Comparative Advantage?
- Definition
- Sources
- The Factor Proportions Model
- Main Idea
- Intuition
- Supply and Demand
- Does the Theory Work?
- Effects of Trade
- Summary of Effects
- Changes in Production
- Factor Price Equalization
- Theoretical Illustration
- Jan. 19: The New Trade Theory
- Assumptions Changed by New Trade Theory
- Constant Returns to Scale
- Perfect Competition
- Homogeneous Products
- Implications of the New Trade Theory
- Intra-Industry Trade
- Possible Loss from Trade with Scale Economies
- New Sources of Gain from Trade
- Scale Economies
- Improved Competition
- Variety
- Rationales for Active Trade Policies
- Jan 24: Tariffs
- What Are They?
- Who Uses Them?
- Effects of Tariffs
- Small Country Case
- Large Country Case
- Size of the Effects
- Jan 26: Preferential Trading Arrangements
- What Are PTAs?
- Examples
- European Union (EU)
- North American Free Trade Agreement (NAFTA)
- Effects of PTAs
- Not the Same as Free Trade
- Trade Creation
- Trade Diversion
- Market Illustration
- NAFTA
- History
- Analysis Beforehand
- Evaluation Afterward
- Jan 31: Nontariff Barriers
- What Are NTBs?
- Main Types
- Quotas
- Voluntary Export Restraints (VERs)
- Government Procurement Regulations
- Customs Procedures
- Standards
- Local Content Requirements
- Unfair Trade Laws
- Effects of Quotas
- Equivalent to a Tariff
- Who Gets the Rents?
- Feb 2: U.S. Trade Policies and Institutions
- Parts of U.S. Government that Handle Trade
- We do NOT have Trade Ministry
- What We DO have
- Main Features of U.S. Trade Policies
- Tariffs, Quotas, VERs
- Escape Clause
- Unfair Trade Laws
- Trade Adjustment Assistance
- Fast Track
- Feb 7: World Trade Arrangements and the WTO
- International Organizations Related to Trade
- WTO
- OECD
- EU, NAFTA, etc.
- UN Organizations
- World Trade Organization
- History, as GATT
- GATT Rounds
- WTO Today
- Functions
- Feb 14: Migration
- Why People Migrate
- Why Wages Differ across Countries
- Endowments
- Technology
- Other
- Supply and Demand for Labor
- Effects of Migration
- On Payments to Factors
- Labor
- Other
- Other Effects
- Policies to Affect Migration
- The U.S. Experience
- Feb 16: Capital Movements and Multinationals
- Terminology
- FDI, DFI, MNEs, MNCs
- Real Versus Financial Capital
- Why Do Firms Invest Abroad?
- What Are Their Options?
- Necessary Conditions
- Reasons for Producing Abroad
- For Local Market
- For Export
- Who Gains and Who Loses?
- Effects that are Similar to Trade
- Effects that Differ from Trade
- Feb 23: The Balance of Trade and International Transactions
- What is the Balance of Trade?
- What Does the Balance of Trade Not Mean?
- International Transactions
- Current Account
- Capital Account
- What Does the Balance of Trade Really Mean?
- From Balance of Payments Accounting
- From National Income Accounting
- Mar 6: Exchange Rates
- In What Forms Are Exchange Rates Reported?
- Bilateral Nominal Rates
- Multilateral (Trade-Weighted) Rates
- Real Rates
- Forward Rates
- What Determines Exchange Rates?
- Markets
- Governments/Central Banks
- Theories of Exchange Rates
- Purchasing Power Parity
- Asset Theory
- Supply and Demand Model
- Mar 8: Pegging the Exchange Rate
- How It's Done
- Market Intervention
- Bands of Fluctuation
- Hybrids of Pegged and Floating
- Who Pegs?
- Mechanics of Intervention
- Reserves
- Money Supply
- Sterilization
- Effects of Pegging
- Mar 13: Macro Policies in International Context
- Recall How Macro Policies Work
- Aggregate Supply and Demand
- Monetary and Fiscal Policies
- How International Markets Change Policy Effectiveness
- Effects of Depreciation
- Through Goods Markets
- Through Asset Markets
- Policies under Peg and Float
- Monetary Policy
- Fiscal Policy
- Effects Across Countries
- Mar 15: Fixed Versus Floating Exchange Rates Details
- Both Systems Are Used
- What the "Experts" Recommend
- Pros and Cons of Floating
- Disruption When Rates Move
- Automatic Adjustment
- Monetary and Fiscal Policies
- Instability of Pegged Exchange Rates
- Speculation
- Alternatives
- Crawling Peg -- See Brazil
- Monetary Unification
- The Impossible Trinity
- Mar 20-22: International Monetary Arrangments from the Gold
Standard On
- The Gold Standard
- Currencies Defined in Gold
- Automatic Adjustment
- The Inter-Ward Period
- Return to the Gold Standard
- Chaos of the 1930s
- The Bretton Woods System
- System of the IMF
- Problems of Bretton Woods
- The Era of Floating Rates
- How Rates Have Moved
- The Current System: None
- Mar 29 - Apr 3: European Monetary Unification
- What Is It?
- History of the EMU
- Convergence
- Why It Is Needed
- The Maastricht Criteria
- How Did They Do?
- Timetable for the EMU
- Pros and Cons of Unification
- Why Adjustment Will Be Hard
- Winners and Losers under EMU
- Effects on the U.S.
- Apr 5: International Policies for Economic Development
- The Issues
- Special Problems of Developing Countries
- Pros and Cons of Free Trade for LDCs
- Infant Industry Argument
- Other Objections to Free Trade
- Track Record of Import Substitution
- Pros and Cons of Free Capital Movements for LDCs
- Efficiency Gains
- Vulnerability to Crisis
- The Debt Crisis of the Early 80s
- Apr 10: Globalization
- Symptoms of Globalization
- Global Markets for Goods
- Global Markets for Capital
- Global Markets for Factors
- Fragmentation
- Non-traded Goods and Factors
- What Has Happened to Wages?
- Explanations of the Rising Skill Premium
- Labor Supply?
- Globalization
- Trade Liberalization
- Growth in Poor Countries
- Technology
- Apr 12: Labor Standards and Trade
- What Are They?
- Standards in the ILO
- Standards in US Trade Law
- Should Labor Standards Be Promoted?
- Of Course?
- Effects on Workers
- Should Standards Be Linked to Trade?
- Who Are For and Against?
- Pros and Cons of Linkage