Department of Economics

ECON 340

Winter 2015, Alan Deardorff

Text Grades Exams Lectures Disabilities Contacts Readings

PURPOSE: Broad overview of international economics and the international economy

Prerequisites: Econ 101 and 102 - Principles of Microeconomics and Macroeconomics
Not Econ 401 or 402 - Intermediate micro and macro theory
Intended for: Students not concentrating in economics
Economics concentrators not ready to specialize in international economics (Economics concentrators may take this course and later take Econ 441 and 442.)
Content: Compared to most economics courses, this one has:
-Less emphasis on theory. You'll learn about theory, but you won't learn to use the tools of economic theory, other than supply and demand.
-More emphasis on the real world, viewed through the news and on the Internet.
-Less emphasis on problem sets. Homework assignments (Study Questions) will be optional and ungraded.
-Much more emphasis on reading.








Click on: Title for full citation to the reading
"Online" the reading itself (via UM if labelled P=Proquest, J=JSTOR, etc.)
"Qs questions on the reading


Topic and Assigned Reading

Jan 7 Course Overview
Jan 12 Introduction to the International Economy
Gerber, Ch. 1. [15p]
Economics Focus, "Why the tail wags the dog" [2p] Online (P) | Qs
Hufbauer and Grieco, "...Payoff from Globalization" [2p] Online | Qs
powell & Udayakumar, "Race, Poverty & Globalization" [6p] Online | Qs
Bhagwati, "Does the Free Market Corrode Moral Character?" [2p] CTools | Qs
Economist, "Trading Up," [3p] Online-Proquest | Qs
Economist, "Signs of Life," [3p] Online-Proquest | Qs
Jan 14 Institutions of the International Economy
Gerber, Ch. 2. [20 p]
Donnan, "Global deal" [2p] CTools | Qs
IMF, "IMF at a Glance" [3p] Online | Qs
Politi, "Governors urge support of trade pacts" [1p] CTools
Mauldin, "Tea-Party Resistance to Trade Pacts" [1p] Online (P) | CTools
Jan 19 No Class - Martin Luther King Jr. Day
Jan 21 Comparative Advantage and the Gains from Trade
Gerber, Ch. 3. (but omit pp. 45-51) [16p]
Deardorff, "...Comparative Advantage" [7p] Online | Qs
Deardorff and Stern, "What You Should Know..." Sec 2 (pp. 405-413) [9p] Online (S) | Qs
Brooks, "Don't Live Simply" [2p] Online | Qs
Dizikes, "Evidence for ... Comparative Advantage" [2p] Online | Qs
Other views:
Prestowitz, "The Losses of Trade" [2p] Online | Qs
Bivens, "Marketing Gains from Trade." [4p] Online | Qs
Jan 26 Modern Theories and Additional Effects of Trade
Gerber, Ch. 4, pp. 63-65, 68-73, and Ch. 5, pp. 92-98 [5th: 93-98] [13p]
Krugman, "Is Free Trade Passé?" [14p] Online (J) | Qs
Bivens, "Globalization and American Wages" [11p] Online | Qs
Jan 28 Tariffs
Gerber, Ch. 6, pp. 114-127 [5th: 119-132], and Ch. 7, pp. 136-143 [5th: 140-145] [17p]
Feenstra, "How Costly...", pp. 159-171,175-178 only. [16p] Online (J) | Qs
Schavey, "Catch-22 of U.S. Trade" [3p] Online | Qs
Feb 2 Nontariff Barriers

Gerber, Ch. 6, pp. 127-132 [5th: 132-137] [6p]
Lindsey and Ikenson, "Coming Home to Roost" Ex. Sum. [2p] Online | Qs
Hufbauer & Schott, "Buy American" [11 pp] Online | Qs

Feb 4 Reasons for Protection
Gerber, Ch. 7, pp. 143-148 [5th: 146-150] [5p]
Magee, "Why Are Trade Barriers So Low?" [6p] Online (W) | Qs
Other views:
Mastel, "Keep Anti-Dumping Laws ..." [3p] Online | Qs
Kain, "Protectionism and National Security" [2p] Online | Qs
Feb 9 United States Trade Policies and Institutions
Gerber, Ch. 7, pp. 149-152 [5th: 151-154] [10p]
Verrill, "...Trade Remedies..." [3p] Online | Qs
Paletta and Hughes, "Deal on Fast Track" [2p] Online (P) | Qs
Glassman, "Illogical Special Trade Deals" [2p] Online | Qs
Roth, "Wage Insurance" [4p] Online | Qs
(Obama), "President’s Trade Policy Agenda"
Feb 11 World Trade Arrangements and the WTO
Gerber, Ch. 2, pp. 20-23 (again) [4p]
Deardorff, "...Overview of the WTO" [38p] Online | Qs
Deardorff and Stern, "What You Should Know..." Sec 3 (pp. 413-421) [8p] Online (S) | Qs
Bouët and Laborde, "Cost of a Failed Doha Round" [8p] Online | Qs
Ikenson, "Weep Not for Doha" [8p] Online | Qs

Feb 16 International Migration of Labor
Gerber, Ch. 4, pp. 83-85 [5th: 84-86] [3p]
Deardorff, "Migration" [3p] Online | Qs
Stelzer, "Immigration: Hard Facts" [4p] CTools | Qs
Borjas, "...Progress of Immigrants" [2p] Online | Qs
Skerry and Rockwell, "The Cost of a Tighter Border" [3p] Online | Qs
Economics Focus, "Drain or Gain?" [2p] Online (P) | Qs
Other Views (on whether to limit immigration):
Eldredge, "Immigration will double population" [4p] Online | Qs
Griswold, "Higher Immigration, Lower Crime" [4p] Online | Qs
Feb 18 International Movements of Capital
Zupnick, "U.S. FDI Abroad" and "FDI in the US" [32p] CTools | Qs
Lipsey, "Direct Investment..." [2p] Online | Qs
Economist, "Company Headquarters," Proquest | Qs
Feb 23 The Balance of Trade and Other Measures of International Transactions
Gerber, Ch. 9 [28p]
Feldstein, "Address Imbalances" [3p] Online (P) | Qs
Karabell, "Global Imbalances Myth" [3p] Online (P) | Qs
Edwards, "Unsustainable Deficit" [2p] Online | Qs
Buffett, "...Selling the Nation..." [5p] Online | Qs
Other Views:
Scott, "Trade deficit with Mexico... " [1p] Online | Qs
Griswold, "Are Trade Deficits Good..." [6p] Online | Qs

Covers material through Feb 16 (International Migration of Labor)
           Spring Break: Mar 2-6
Mar 9 Exchange Rates
Gerber, Ch. 10, pp. 209-226 [5th: 209-227] [20p]
Economist, "Currency envy" [2p] Online (P) | Qs
Economist, "Basket of sliders" [2p] Online (P) | Qs
Economist, "Fixed Rates" [4p] Online (P) | Qs
Mar 11 Pegging the Exchange Rate
Gerber, Ch. 10, pp. 227-233 [4th: 228-235] [8p]
Levy, "We're Serious" [2p] Online | Qs
Ferguson, "Our Currency, Your Problem" [6p] Online | Qs
Mar 16 International Macroeconomics
Gerber, Ch. 11 [23p]
Stiglitz, "America Has Little to Teach China" [2p] Online (P) | Qs
Mann and Plück, "When the Dollar Bill Comes Due" [2p] Online | Qs
Other views:
Perry, "Thank the Chinese Currency Manipulators" [3p] Online | Qs
Krugman, "Taking On China" [2p] Online | Qs
Mar 18 Fixed Versus Floating Exchange Rates
Gerber, Ch. 10, pp. 233-235 [4p]
Makin, "Exchange Rate Stability..." [6p] Online | Qs
Frankel, "International Financial Architecture" [8p] Online+ Fig 3 | Qs
Buttonwood, "Forty years on" [2p] Online (P) | Qs
Mar 23 European Monetary Unification and the Euro
Gerber, Ch. 10, pp. 235-239 [5th: 235-240], and Ch. 14, pp. 342-350 [5th: 348-353] [12p]
Levin, A Guide to the Euro, pp. 41-51. [11p] CTools | Qs
Solomon, "International Effects..." [7p] Online | Qs
Barber, "EU Reluctant to Discipline" [1p] Online (P) | Qs
Forelle & Walker, "...Dithering at the Top..." [4p] Online (P) | Qs
Kulish, "No Fireworks for Euro..." [4p] Online (P) | Qs
Mar 25 Preferential Trading Arrangements and the NAFTA
Gerber, Ch. 13, pp. 307-316 [5th: 314-321] [9p]
USTR, "Trade Agreements" & "Free Trade Agreements" [2p] Online & Online | Qs
Barfield, "Trans-Pacific Partnership" [7p] Online | Qs
Evenett and Stern, "Transatlantic trade talks" [3p] Online | Qs
Kanter and Jolly, "For Trade Deal with U.S., E.U." [3p] Online-Proquest | Qs
Posen, "The Case for Trade" [2p] Online-Proquest | Qs
Other views:
Faux, "Overhauling NAFTA" [2p] Online | Qs
Mar 30 International Policies for Economic Development, Trade
Gerber, Ch. 15, pp. 357-366 [5th: 362-371], and Ch. 16 [36p]
Bailey, "Intangible Wealth" [2p] Online (P) | Qs
Copenhagen Consensus, "2008 Results" [6p] Online | Qs
Prusa, "...Antidumping" [2p] Online | Qs
FAO, "Cotton Subsidies..." [2p] Online | Qs
Baker, "WTO and the Poor" [2p] Online | Qs
Covers Feb 18 (International Movements of Capital) through Mar 23 (European Monetary Unification and the Euro)
Apr 6 International Policies for Economic Development, Financial
Gerber, Ch. 12 and Ch. 15, pp. 366-80 [5th: 371-87] [40p]
Crook, "A cruel sea of capital" [4p] Online (P) | Qs
Kharas, "Ten Years After the East Asian Crisis" [2p] Online | Qs
Forbes, "The Costs of Capital Controls..." [2p] Online | Qs
Krueger and Srinivasan, "Harsh Consequences of Forgiveness" [2p] Online (P) | Qs
Lerrick, "World Bank Lending" [2p] Online | Qs
Apr 8 International Policies for Economic Development, Aid
Economics Focus, "Gauging generosity" [4p] Online (P) | Qs
Schaefer, "American Generosity..." [3p] Online | Qs
Rice, "...Fight Global Poverty" [3p] Online | Qs
Roberts, "...Millennium Challenge Account" [5p] Online | Qs
Fraser Institute, "When Foreign Aid Doesn't" [4p] Online | Qs
Levinsohn and McMillan, "Does Food Aid Harm..." [2p] Online | Qs
Eberstadt & Adelman, "Foreign Aid: What Works and What Doesn't" [6p] Online | Qs
Economist, "Aid to the rescue" [3p] Online (Proquest) | Qs
Apr 13 Outsourcing and Offshoring
Blinder, "Offshoring Rattles Me" [2p] Online | Qs
Brainard and Litan, " 'Offshoring' Service Jobs" [10p] Online | Qs
Amiti and Wei, "Offshoring Raises Productivity" [1p] Online | Qs
Mandel, "Real Cost of Offshoring" [3p] Online | Qs
Friedman, "Made in the World" [3p] | Online (P) | Qs
Economist, "Offshoring: Welcome home" [3p] | Online (P) | Qs
Economist Special Report on Outsourcing and Offshoring 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8
Apr 15 International Business - Visitor: John W. Sweetland
Apr 20 Environment, Labor Standards and Trade
Gerber, Ch. 8 [20p]
Krugman, "Climate, Trade, Obama" [2p] Online | Qs
Reuters, "China denounces carbon tariff" [1p] Online | Qs
Jones, "Should Environmentalists Support Free Trade?" [5p] Online | Qs
Stern, "Labor Standards and Trade Agreements" pp. 1-14, 20-21 [16p] Online | Qs
Krugman, "In Praise of Cheap Labor" [3p] Online | Qs
Narlikar, "Don't Blame the Brands" [2p] Online | Qs
Broekhuizen, "U-M says licensees must follow safety accord" [2p] Online | Qs
Porter, "Globalization That Works for Workers at Home"
Apr 30
*** FINAL EXAM *** (Cumulative, 8:00-10:00 AM)

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