1. Course Organization
2. Overview of the World Economy
1. Elements of the World Economy
2. Ways that Countries Interact
1. Trade
2. Capital Flows
3. Migration
3. Policies that Affect Others

1. The Three Main Institutions
1. IMF = International Monetary Fund
2. World Bank
3. WTO = World Trade Organization
2. Why They Were Created, and When
3. How They Have Changed
4. Their Reputations Today
5. Other Institutions

1. Why Countries Trade
1. Price Differences
2. Supply and Demand
3. Determinants of Prices
2. Ricardian Model of Trade
1. Examples
1. With Absolute Advantage
2. With Comparative Advantage
2. Wages and Prices in the Ricardian Model
3. Lessons of the Ricardian Model
3. Generality of Gains from Trade

1. Sources of Comparative Advantage
2. The Heckscher-Ohlin Model
1. Main Idea
2. Intuition
3. Does the Theory Work?
3. Effects of Trade
1. Changes in Production
2. Factor Price Equalization
4. The New Trade Theory
1. Assumptions
2. Implications

1. What Are They?
2. Who Uses Them?
3. Effects of Tariffs
1. Small Country Case
1. Effects on quantities and prices
2. Effects on economic welfare
2. Large Country Case
1. Effect on world price
2. Effect on welfare
3. Size of the Effects

1. What Are NTBs?
2. Main Types
1. Quotas
2. Voluntary Export Restraints (VERs)
3. Variable Levies
4. Government Procurement Regulations
5. Customs Procedures
6. Standards
7. Local Content Requirements
8. Unfair Trade Laws
3. Effects of Quotas
1. Equivalent to a Tariff
2. Who Gets the Rents?

1. Reasons that Do NOT Make Economic Sense
1. Pauper Labor
2. Fairness
3. Patriotism
4. Retaliation
2. Reasons that DO Make Economic Sense, with Counter-Arguments
1. Revenue
2. Optimal Tariff
3. Infant Industry
4. National Security
5. Retaliation
6. Other...

Feb 5: Visit by John W. Sweetland

1. Parts of U.S. Government that Handle Trade
1. We Do NOT Have a 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. Dumping and Anti-Dumping
4. Why the U.S. Protects
5. Trends in U.S. Trade Policy

1. International Organizations Related to Trade
2. World Trade Organization
1. History, as GATT
2. GATT Rounds
3. WTO Today
4. Functions
3. Current Issues
1. Seattle Protests and Beyond
2. China Entry

1. Why People Migrate
2. Why Wages Differ across Countries
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

1. Terminology
1. FDI, DFI, MNEs, MNCs
2. Real Versus Financial Capital
2. Purposes Served by FDI
1. Local Market versus Export
2. Reasons for FDI
3. Who Gains and Who Loses?
1. Effects that are Similar to Trade
2. Effects that are Similar to Migration
3. Other Effects

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

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

1. How It's Done
1. Market Intervention
2. Bands of Flucuation
3. Hybrids of Pegged and Floating
2. Who Pegs?
3. Mechanics of Intervention
1. Reserves
2. Money Supply
3. Sterilization
4. Effects if Pegging

1. Recall Macro from Econ 102
1. Aggregate Supply and Demand
2. Policies
2. Effects ON the Exchange Market
1. Expansion
2. Interest Rate
3. Effects OF the Exchange Market
1. Depreciation via Trade
2. Depreciation via Net Wealth
4. Effects THROUGH the Exchange Market

1. Both Systems Are Used
2. What the "Experts" Recommend
3. Pros and Cons of Floating
1. Disruption When Rates Move
2. Automatic Adjustment
4. Pros and Cons of Pegging
1. Stability
2. Instability
5. Alternatives
1. Crawling Peg – See Brazil
2. Monetary Unification

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. Illustration
4. NAFTA
1. History
2. Analysis Beforehand
3. Evaluation Afterward

1. What Is It?
2. History of the EMU
3. Timetable for the EMU
4. Pros and Cons of Unification
1. Why Adjustment Will Be Hard
2. Winners and Losers under EMU
5. Effects on the U.S.

1. The Issues
2. The Washington Consensus
3. Special Problems of Developing Countries
4. Pros and Cons of Free Trade for LDCs
1. Infant Industry Argument
2. Other Objections to Free Trade
3. Exports and Growth
4. Track Record of Import Substitution
5. Policy Recommendations

1. The Issues
2. Choice of Exchange Rate Regimes
3. Pros and Cons of Free Capital Movements
4. Debt Problems of the 1980s
5. The Asian Crisis of 1997

1. Symptoms of Globalization
1. Global Markets for Goods
2. Global Markets for Capital
3. Global Markets for Factors
4. Fragmentation
5. Non-traded Goods and Factors
2. What Has Happened to Wages?
3. Explanations of the Rising Skill Premium
1. Labor Supply?
2. Globalization
1. Trade Liberalization
2. Growth in Poor Countries
3. Technology

1. What Are They?
1. Standards in the ILO
2. Standards in US Trade Law
2. Should Labor Standards Be Promoted?
1. Of Course?
2. Effects on Workers
3. Should Standards Be Linked to Trade?
1. Who Are For and Against?
2. Pros and Cons of Linkage