Download ECON 420: International Economics - University of Illinois Urbana

ECON420:InternationalEconomics
UniversityofIllinoisatUrbana-Champaign
CollegeofLiberalArts&Sciences
DepartmentofEconomics
LuizFelipeLeiteEstanislaudoAmaral
Fall2016
114DavidKinleyHall
Tuesdays/Thursdays,12:30pm-1:50pm
Communication:
Office:15DavidKinleyHall
E-mail:[email protected]
OfficeHours: Tuesdays,5:00pm-6:30pm.
Fridays,4:00-5:30pm.
(Knockonroom15,DKH,andI'llcomeouttomeetyou)
Orbyappointment
CatalogDescription:
Introduction to the theory of international trade and finance with selected application to current
problems of trade policy, balance of payments adjustment, the international monetary system, and
globalizationissues.(3Hours)Prerequisite:ECON302orequivalent,orconsentofinstructor;ECON303
isrecommended.
CourseDescription:
This course is an introduction to international economics targeted toward economics majors at a 400
level.Itsmaintopic,therefore,concernseconomicinteractionsbetweenagents(consumers,firmsand
governments)ofdifferentcountries.Itisdividedintotworoughlyequalparts:internationaltradeand
internationalfinance.
Thefirstpart,internationaltrade,focusesonthemicroeconomicsofinternationaleconomics.Itbegins
withasimplemodeloftradeinacontextofpartialequilibriumtoaddresstradepolicyissues.Then,it
covers the main historical theories regarding international trade, based on productivity and resource
differences, as well as more recent contributions, based on economies of scale and firm differences.
Finally, it discusses political considerations regarding international trade. This part tries to answer
questionssuchas"Istradebeneficial?","Whatdrivestradepatterns?","Whogainsandwholoseswith
internationaltrade?","Whatkeepstradefromexpanding?".
The second part, international finance, focuses on the macroeconomics of international economics. It
startscoveringbasicdefinitionsofnationalaccountsforopeneconomiesandthebalanceofpayments.
Then,itdevelopsastudyofexchangeratesandtheyareaffectedbymonetarysupplydecisions.After
that,macroeconomicpolicyforopeneconomiesiscoveredandusedasatooltounderstandexchange
rateregimesandotherinternationalfinanceissues.Thisparttriestoanswerquestionssuchas"Howto
measurevariablesforopeneconomics?","Whatdeterminesexchangerates?","Howeconomicpolicyis
differentininternationalcontexts?","Whataretheconsequencesofdifferentexchangerateregimes?".
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CourseFormat:
Thecoursewillbecomprisedofbiweeklylectures.
CourseObjectives:
• Introducestudentstothefieldofinternationaleconomics.
• Connectthetheoriesofinternationaleconomicstocurrentissues.
• Showstudentshoweconomictheorycanbeappliedtotheunderstandingofpracticalissues.
LearningResources:
Required:
•
•
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•
Krugman,Obstfeld,Melitz.2012.InternationalEconomics:TheoryandPolicy.10thEdition,
Pearson.(Earliereditionsareacceptable,theonlineplatformwillnotbeused).
Eaton,JonathanandSamuelKortum.2012."PuttingRicardotoWork."JournalofEconomic
Perspectives,26(2):65-90.(https://www.aeaweb.org/articles?id=10.1257/jep.26.2.65)
Lane,PhilipR..2012."TheEuropeanSovereignDebtCrisis."JournalofEconomicPerspectives,
26(3):49-68.(https://www.aeaweb.org/articles?id=10.1257/jep.26.3.49)
Melitz,MarcJ.andDanielTrefler.2012."GainsfromTradeWhenFirmsMatter."Journalof
EconomicPerspectives,26(2):91-118.
(https://www.aeaweb.org/articles?id=10.1257/jep.26.2.91)
Additional:
•
•
Eichengreen,Barry.2008.GlobalizingCapital:AHistoryoftheInternationalMonetarySystem.
2ndEdition,PrincetonUniversityPress.
Helpman,Elhahan.2011.UnderstandingGlobalTrade.1stEdition,TheBelknapPressofHarvard
UniversityPress.
StudentAssessment:
Scoring
• Homework-10%ofTotalPoints
• PaperAssignment1-5%ofTotalPoints
• PaperAssignment2-5%ofTotalPoints
• PaperAssignment3-5%ofTotalPoints
• Exam1-15%ofTotalPoints
• Exam2-15%ofTotalPoints
• Exam3-15%ofTotalPoints
• FinalExam-30%ofTotalPoints
Yourgradewillbecalculatedasapercentageofthesepoints.Thefinalgradefortheclasswillbescored
out of 100 points. To calculate your grade before all exams and assignments are finalized, divide the
totalpointsyouhavescoredinthecoursesofarbythetotalamountofpotentialpoints.Multiplythat
numberby100androundtothenearestintegerthencomparethatnumbertothePlus/MinusGrade
Cutoffsbelow.
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Plus/MinusGradeCutoffs
A+≥97
B+≥87
C+≥77
D+≥67
60>F
97>A≥94
87>B≥84
77>C≥74
67>D≥64
94>A-≥90
84>B-≥80
74>C-≥70
64>D-≥60
AssessmentPolicies
HomeworkAssignmentPolicy:
HomeworkistobecompletedandsubmittedonlinethoughMoodle.Therewillbe13homeworksets.
TheywillbedueonFridaysat11:55pm.Lateassignmentsreceivenocredit.Thehomeworkportionof
yourgradewillbetheaverageofallyourassignmentscoreswiththelowestassignmentgradedropped.
PaperAssignmentPolicy:
Therewillbethreepaperassignments.Ineachoftheseassignmentsstudentsmustread,summarizeand
discussonetextrelatedtocontentseeninclass,producinga4to6pagereport.Paperassignmentsare
tobeturnedinatthebeginningoftheclassinwhichtheyaredue.Lateassignmentsreceivenocredit.
Assignmentscanbeturnedinearlyatyourinstructor’soffice.Detailedinstructionswillbegivenlater.
ExamPolicy:
Intheeventthatastudentmissesoneofthefirstthreeexams,thepointsfromthemissedexamwillbe
placed on the final. The student must provide a reasonable motive for missing one of the three first
exams.Therearenomake-upexams.Thefinalwillthencomprise45%ratherthan30%oftotalpoints.
Intheeventthatastudentmissesasecondin-termexam,theinstructorreservestherighttogivethe
studentazeroonthatexam.
The following materials are allowed for use during the exam: accounting calculator or four-function
calculator.Therearetobenobooks,papersotherthantheexamitself,cell-phonesorotheritemsthat
connecttotheInternet.StudentsfoundtobeusingunapproveditemsareinviolationoftheAcademic
IntegritypolicyoftheUniversityandwillbesubjecttodisciplinaryaction.
ImportantDates:
DeadlinetoAdd:September2.
Exam1:September20.
PaperAssignment1:September27
Exam2:October11.
DeadlinetoDropwithoutagradeofW:October16.
PaperAssignment2:October20.
Exam3:November8.
PaperAssignment3:December6.
FinalExam:December12,locationTBA,1:30pm-4:30pm.
FinalExamConflictPolicy:
FromtheUniversity’sfinalexampolicy:
• Anystudenthavingmorethantwoconsecutivefinalexaminationsisentitledtoreschedulingas
followsifheorshetakesthefollowingactionnolaterthanthelastdayofclasses:
o Thestudentmustinvestigatewhetheraconflictexaminationisbeingheldatanother
timeforanyoftheexaminationsinvolved.
o Ifaconflictexaminationhasbeenscheduledforanyofthecourses,thestudentmust
takeoneormoreoftheseconflictexaminations.Ifconflictexaminationsareofferedfor
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o
o
morethanonecourse,thestudentmusttaketheconflictforthecoursethathasthe
largestnumberofstudents.
Ifnoconflictexaminationshavebeenscheduled,thestudentmustcontactthe
instructorofthecoursehavingthelargestnumberofstudents.Thecontactmustbe
madenolaterthanthelastdayofclasses,andthatinstructormustprovideamakeup
examination.
Normallyinasemesterseveralcombined-sections,conflict,andnoncombined
examinationsaregivenatthesametime.Asaguidetoresolvingconflicts,anorderof
priorityhasbeenestablishedwithineachexaminationperiod,andastudentshould
resolveaconflictusingthepublishedexaminationschedulesandthefollowingpriority
guidelines.
§ Nationalandstateprofessionalexaminations(e.g.,CPA,actuarialscience,
ArchitectureRegistrationExamination)takepriorityovercampusfinal
examinations.Aninstructormustofferaconflictexaminationtoastudent
scheduledtotakeanationalorstateprofessionalexaminationandacampus
finalexaminationatthesametime.
§ Anoncombinedcourseexaminationhasprecedenceoveranycombinedsectionsorconflictexamination.
§ Adepartmentofferingacombined-sectionsfinalexaminationmustprovidea
conflictexaminationifrequiredtoaccommodatestudentconflicts.
TheUniversity’sfinalexampolicyisavailableat:
http://studentcode.illinois.edu/article3_part2_3-201.html
EmergencyResponseRecommendations:
Theuniversitymaintainsguidelinesforemergencyresponses.Alistofrecommendationswhento
evacuateandwhentofindshelterareavailableat:
http://illinois.edu/cms/2251/general_emergency_response_recommendations_8_16_13_final.docx
Floorplansforspecificbuildingsareavailableat:
http://police.illinois.edu/emergencyplanning/floorplans/
StatementonAccommodations:
Toobtaindisability-relatedacademicadjustmentsand/orauxiliaryaids,studentswithdisabilitiesmust
contactthecourseinstructorandtheDisabilityResourcesEducationalServices(DRES)assoonas
possible.TocontactDRESyoumayvisit1207S.OakStreet,Champaign,call333-4603(V/TTY),oremail
[email protected].
AcademicIntegrity:
“TheUniversityhastheresponsibilityformaintainingacademicintegritysoastoprotectthequalityof
educationandresearchonourcampusandtoprotectthosewhodependuponourintegrity.
ExpectationsofStudents.Itistheresponsibilityofeachstudenttorefrainfrominfractionsofacademic
integrity,fromconductthatmayleadtosuspicionofsuchinfractions,andfromconductthataidsothers
insuchinfractions.StudentshavebeengivennoticeofthisPartbyvirtueofitspublication.Regardlessof
whetherastudenthasactuallyreadthisPart,astudentischargedwithknowledgeofit.Ignoranceisnot
adefense.”
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TheUniversity’sfullacademicintegritypolicyisavailableat:
http://studentcode.illinois.edu/article1_part4_1-401.html
SemesterSchedule:
InternationalTrade
• Aug.23:InternationalEconomics:AnIntroduction.
• Aug.25:WorldTrade:AnOverview.
• Aug.30:InternationalTradeinPartialEquilibrium.
• Sep.1:InstrumentsofTradePolicy.
• Sep.2:Homework1due.
• Sep.6:InternationalTradeinGeneralEquilibrium.
• Sep.8:TheRicardianModelofTrade(I).
• Sep.9:Homework2due.
• Sep.13:TheRicardianModelofTrade(II).
• Sep.15:TheHeckscher-OhlinModel(I).
• Sep.16:Homework3due.
• Sep.20:Exam1(inclass).
• Sep.22:TheHeckscher-OhlinModel(II).
• Sep23:Homework4due.
• Sep.27:EconomiesofScaleandInternationalTrade.
PaperAssignment1due.
• Sep.29:FirmsinTheGlobalEconomy.
• Sep.30:Homework5due.
• Oct.4:ThePoliticalEconomyofInternationalTrade.
• Oct.6:AHistoricalOverviewofInternationalTrade.
• Oct.7:Homework6due.
• Oct.11:Exam2(inclass).
InternationalFinance
• Oct.13:NationalIncomeAccountingforanOpenEconomy.
• Oct.14:Homework7due.
• Oct.18:TheBalanceofPayments.
• Oct.20:TheAssetApproachtoExchangeRateDetermination.
PaperAssignment2due.
• Oct.21:Homework8due.
• Oct.25:MoneyMarketsandExchangeRates.
• Oct.27:ExchangeRateDeterminationintheLongRun.
• Oct.28:Homework9due.
• Nov.1:ThePurchasingPowerParityTheory.
• Nov.3:TheRealExchangeRate.
• Nov.4:Homework10due.
• Nov.8:Exam3(inclass).
• Nov.10:OpenEconomyMacroeconomicEquilibrium(I)
• Nov.11:Homework11due.
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Nov.15:OpenEconomyMacroeconomicEquilibrium(II)
Nov.17:MacroeconomicPolicyinanOpenEconomy.
Nov.18:Homework12due.
Nov.22:Noclass(fallbreak).
Nov.24:Noclass(fallbreak).
Nov.29:FixedExchangeRateRegimes.
Dec.1:AlternativeExchangeRateRegimes.
Dec.2:Homework13due.
Dec.6:InternationalMonetarySystems:AHistoricalOverview.
PaperAssignment3due
Dec.8:Readingday.
Dec.12:FinalExam,1:30pm-4:30pm,locationTBA.
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