Department of Economics

ECON 340

Fall 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.










There is a good chance that I will have to miss one or two classes this term, and I won't know much in advance when these will be. If that happens, topics may be pushed to the next later date, and if necessary the final topic, Environment, Labor Standards and Trade, will be dropped.

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

Sep 5 Course Overview
Sep 10 Introduction to the International Economy [61p]
Gerber, Chs. 1,2. [36p]
IMF, "IMF at a Glance" [3p] Online | Qs
Economics Focus, "Why the tail wags the dog" [2p] Canvas | Qs
Economist, "Trading Up," [3p] 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
Sep 12 Current Tensions in the International Economy [22p]
Swanson, "...Nearing Nafta Compromise" [6p] Canvas | Qs
Economist, "Not with Brexit" [4p] Canvas | Qs
Trade War
Bown and Kolb, "Trump's Trade War Timeline" [3p] Online | Qs
Legrain, "Why China Will Win the Trade War" [4p] Online | Qs
Barfield, "Trump wants to withdraw from the WTO" [3p] Online | Qs
Newmyer, "...Currency claims" [2p (of 9)] Canvas | Qs
Sep 17 Comparative Advantage and the Gains from Trade [43p]
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] Canvas | Qs
Costinot and Rodríguez-Clare "How Large Are the U.S. Economy's Gains from Trade?" [2p] Online | Qs
Other views:
Prestowitz, "The Losses of Trade" [2p] Online | Qs
Bivens, "Marketing Gains from Trade." [4p] Online | Qs
Sep 19 Modern Theories and Additional Effects of Trade [38p]
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
Sep 24 Tariffs [36p]
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..." (Canvas)
Sep 26 Nontariff Barriers [23p]

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

Oct 1 Reasons for Protection [15p]
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
Oct 3 United States Trade Policies and Institutions [21p]
Gerber, Ch. 7, pp. 151-154 [6th: 149-152] [4p]
USTR, "2018 Trade Policy Agenda" [2p] Canvas | Qs
Lakatos, "Back to the 1930s..." [4p] Online | Qs
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
Oct 8 World Trade Arrangements and the WTO [63]
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
Schlesinger, "How China Swallowed the WTO" [12p] Canvas | Qs
Rodrik, "WTO has become dysfunctional" [3p] Canvas | Qs

Oct 10 International Migration of Labor [45]
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
Oct 15 No Class - Fall Break
Oct 17 International Movements of Capital [37p]
Zupnick, "U.S. FDI Abroad" and "FDI in the US" [32p] Canvas | Qs
Lipsey, "Direct Investment..." [2p] Online | Qs
Economist, "Company Headquarters," [3p] Canvas | Qs
Covers material through Oct 10 (International Migration of Labor)
Oct 24 The Balance of Trade and Other Measures of International Transactions [53]
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
Obstfeld, "Targeting specific trade deficits is a game of whack-a-mole" [3p] Canvas | Qs
Other Views:
Scott, "Trade deficit with Mexico... " [1p] Online | Qs
Griswold, "Are Trade Deficits Good..." [6p] Online | Qs
Oct 29 Exchange Rates [28]
Gerber, Ch. 10, pp. 213-231 [6th: 209-226] [18p]
Economist, "Currency envy" [2p] Canvas | Qs
Economist, "Watch your BMI" [4p] Canvas | Qs
Economist, "Fixed Rates" [4p] Canvas | Qs
Oct 31 Pegging the Exchange Rate [16p]
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
Nov 5 International Macroeconomics [30]
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
Nov 7 European Monetary Unification and the Euro [45]
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 euro's key weakness" [3p] Canvas | Qs
Nov 12 Preferential Trading Arrangements and the NAFTA [50p]
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 Oct 17 (International Movements of Capital) through Nov 7 (European Monetary Unification and the Euro)
Nov 19 International Policies for Economic Development, Trade [30]
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
Nov 21 International Policies for Economic Development, Financial [52]
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
Nov 26 International Policies for Economic Development, Aid [31]
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
Nov 28 Outsourcing and Offshoring [24]
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
Dec 3 Environment, Labor Standards and Trade [55p]
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] Canvas | 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
Dec 5 Review
Dec 10 International Business - Visitor: John W. Sweetland
Dec 20
*** FINAL EXAM *** (Cumulative, 8:00-10:00 AM)

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