Department of Economics

ECON 340

Winter 2018, Alan Deardorff

Text Clickers Grades Exams Lectures Policies 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.)
"Canvas" the reading itself (via UM Canvas course site)
"Qs" questions on the reading


Topic and Assigned Reading

Jan 3 Course Overview
Jan 8 Introduction to the International Economy
Gerber, Ch. 1. [15p]
Economics Focus, "Why the tail wags the dog" [2p] Canvas | Qs
Economist, "Trading Up," [3p] Canvas | Qs
Donnan, "Global trade slowdown," [4p] Canvas | Qs
Swanson, "The world today," [3p] Canvas | Qs
Black et al., "One Tiny Widget's Dizzying Journey," [7p] Online | Qs
Perry, "How important is international trade to each US state's economy?," [6p] Online | Qs
Donnan, "Globalisation marches on without Trump," [11p] Canvas | Qs
Jan 10 Institutions of the International Economy
Gerber, Ch. 2. [21 p]
Donnan, "Death of Doha and birth of new WTO" [3p] Canvas | Qs
IMF, "IMF at a Glance" [3p] Online | Qs
Mitchell et al, "Beijing plans rival Asia-Pacific trade deal" [2p] Canvas | Qs
Chang, "Why Britain left the EU" [12p] Online | Qs
Jan 15 No Class - Martin Luther King, Jr. Day
Jan 17 Comparative Advantage and the Gains from Trade
Gerber, Ch. 3. (but omit "Comparative Productivity Advantage and the Gains from Trade," pp. 47-53 in 7th ed., pp. 45-51 in 6th ed.) [16p]
Deardorff, "...Comparative Advantage" [7p] Online | Qs
Brooks, "Don't Live Simply" [2p] Online | Qs
Dizikes, "Evidence for ... Comparative Advantage" [2p] Online | Qs
Giles, "Economists must work harder" [4p] Canvas | Qs
Bernhofen & Brown "Evidence from nineteenth century Japan" [4p] Online | Qs
Other views:
Prestowitz, "The Losses of Trade" [2p] Online | Qs
Bivens, "Marketing Gains from Trade." [4p] Online | Qs
Jan 22 Modern Theories and Additional Effects of Trade
Gerber, Ch. 4, pp. 65-67, 70-75 [6th: 63-65, 68-73], and Ch. 5, pp. 94-100 [6th: 92-98] [13p]
Krugman, "Is Free Trade Passé?" [14p] Online (J) | Qs
Bivens, "Globalization and American Wages" [11p] Online | Qs
Jan 24 Tariffs
Gerber, Ch. 6, pp. 116-129 [6th: 114-127], and Ch. 7, pp. 138-145 [6th: 136-143] [17p]
Feenstra, "How Costly...", pp. 159-171,175-178 only. [16p] Online (J) | Qs
Schavey, "Catch-22 of U.S. Trade" [3p] Online | Qs
Swanson, "...a weird legal dispute..."
Jan 29 Nontariff Barriers

Gerber, Ch. 6, pp. 129-134 [6th: 127-132] [6p]
Lindsey and Ikenson, "Coming Home to Roost" Ex. Sum. [2p] Online | Qs
Hufbauer & Schott, "Buy American" [11 pp] Online | Qs
Economist, "Buying Local" [4 pp] Canvas | Qs

Jan 31 Reasons for Protection
Gerber, Ch. 7, pp. 145-150 [6th: 143-148] [5p]
Magee, "Why Are Trade Barriers So Low?" [6p] Canvas | Qs
Other views:
Mastel, "Keep Anti-Dumping Laws ..." [2p] Canvas | Qs
Kain, "Protectionism and National Security" [2p] Online | Qs
Feb 5 United States Trade Policies and Institutions
Gerber, Ch. 7, pp. 151-154 [6th: 149-152] [4p]
Verrill, "...Trade Remedies..." [3p] Canvas | Qs
Paletta and Hughes, "Deal on Fast Track" [2p] Online (P) | Qs
Glassman, "Illogical Special Trade Deals" [2p] Online | Qs
Roth, "Wage Insurance" [4p] Canvas | Qs
(Trump), "President's Trade Policy Agenda"
Donnan, "US poised to let emerging markets trade pact expire"
Feb 7 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. 413-419) [6p] Canvas | Qs
Donnan, "US accused of undermining WTO" [3p] Canvas | Qs
Schlesinger, "How China Swallowed the WTO" [12p] Canvas | Qs

Feb 12 International Migration of Labor
Gerber, Ch. 4, pp. 85-87 [6th: 83-85] [3p]
Deardorff, "Migration" [3p] Online | 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] Canvas | Qs
Donnan, "The migration numbers game" [7p] Canvas | Qs
Economist, "Immigration Economics" [3p] Canvas | Qs
Economist, "From south to south" [5p] Canvas | Qs
Porter, "Can Immigration Hurt?" [4p] Canvas | Qs
Economist, "The Progressive Case for Immigration" [5p] Canvas | 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 14 International Movements of Capital
Zupnick, "U.S. FDI Abroad" and "FDI in the US" [32p] Canvas | Qs
Lipsey, "Direct Investment..." [2p] Online | Qs
Economist, "Company Headquarters," Canvas | Qs
Covers material through Feb 12 (International Migration of Labor)
Feb 21 The Balance of Trade and Other Measures of International Transactions
Gerber, Ch. 9 [28p]
Karabell, "Global Imbalances Myth" [3p] Online (P) | Qs
Buffett, "...Selling the Nation..." [5p] Online | Qs
Mankiw, "Don't Worry About the Trade Deficit" [3p] Canvas | Qs
Porter, "Why the Trade Deficit Matters" [4p] Canvas | Qs
Other Views:
Scott, "Trade deficit with Mexico... " [1p] Online | Qs
Griswold, "Are Trade Deficits Good..." [6p] Online | Qs
           Spring Break: Feb 26 - Mar 2
Mar 5 Exchange Rates
Gerber, Ch. 10, pp. 213-231 [6th: 209-226] [18p]
Economist, "Currency envy" [2p] Canvas | Qs
Economist, "Of Bucks and Burgers" [4p] Canvas | Qs
Economist, "Fixed Rates" [4p] Canvas | Qs
Mar 7 Pegging the Exchange Rate
Gerber, Ch. 10, pp. 232-238 [6th: 227-233] [6p]
Levy, "We're Serious" [2p] Online | Qs
Ferguson, "Our Currency, Your Problem" [6p] Canvas | Qs
Varas, "Is China Still a Currency Manipulator?" [2p] Online | Qs
Mar 12 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
Economist, "More Spend, Less Thrift" [3p] Canvas | Qs
Mar 14 Fixed Versus Floating Exchange Rates
Gerber, Ch. 10, pp. 238-242 [6th: 233-235] [4p]
Makin, "Exchange Rate Stability..." [6p] Online | Qs
Frankel, "International Financial Architecture" [8p] Online+ Fig 3 | Qs
Buttonwood, "Forty years on" [2p] Canvas | Qs
Mar 19 European Monetary Unification and the Euro
Gerber, Ch. 10, pp. 240-245 [6th: 235-239], and Ch. 14, pp. 349-357 [6th: 342-350] [12p]
Levin, A Guide to the Euro, pp. 41-51. [11p] Canvas | Qs
Kulish, "No Fireworks for Euro..." [4p] Canvas | Qs
Baldwin et al., "Rebooting the Eurozone" [15p] Online | Qs
Smaghi, "The perverse loop that is the euro’s key weakness," Canvas
Mar 21 Preferential Trading Arrangements and the NAFTA
Gerber, Ch. 13, pp. 314-323 [6th: 307-317] [9p]
USTR, "Trade Agreements" & "Free Trade Agreements" [2p] Online & Online | Qs
Villarreal & Fergusson, "The North American Free Trade Agreement" [1p] Canvas | Qs
Brown, "Review of NAFTA Revisited" [3p] Online (J) | Qs
Posen, "The Case for Trade" [2p] Canvas | Qs
DeLong, "NAFTA and other trade deals" [28p] Online | Qs
Schultz & Aspe, "Nafta Needs an Update, Not Repeal" [3p] Canvas | Qs
Other views:
Faux, "Overhauling NAFTA" [2p] Online | Qs
Covers Feb 15 (International Movements of Capital) through Mar 20 (European Monetary Unification and the Euro)
Mar 28 International Policies for Economic Development, Trade
Gerber, Ch. 15, pp. 365-374 [6th: 357-366], 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
Apr 2 International Policies for Economic Development, Financial
Gerber, Ch. 12 and Ch. 15, pp. 374-88 [6th: 366-80] [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 4 International Policies for Economic Development, Aid
Economics Focus, "Gauging generosity" [4p] Canvas | 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] Canvas | 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] Canvas | Qs
Economist, "Size matters" [1p] Canvas | Qs
Apr 9 Outsourcing and Offshoring
Blinder, "Offshoring Rattles Me" [2p] Canvas | Qs
Brainard and Litan, " 'Offshoring' Service Jobs" [10p] Online | Qs
Amiti and Wei, "Offshoring Raises Productivity" [1p] Online | Qs
Friedman, "Made in the World" [3p] | Online (P) | Qs
Economist, "Welcome home: Offshoring" [3p] | Canvas | Qs
Schuman, "Is China Stealing Jobs?" [3p] | Online (P) | Qs
Other views:
Roberts, ,"The Offshore Outsourcing of American Jobs," [2p] | Online | Qs
Apr 11 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] Canvas | Qs
Stern, "Labor Standards and Trade Agreements" pp. 1-14, 20-21 [16p] Online | Qs
Krugman, "In Praise of Cheap Labor" [3p] Online | Qs
Bhagwati, "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" [4p] Online (P) | Qs
Apr 16 International Business - Visitor: John W. Sweetland
Apr 25
*** FINAL EXAM *** (Cumulative, 8:00-10:00 AM)

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