COURSE OUTLINE:

A. INTRODUCTION

• Why Do Nations Trade?

B. INTERNATIONAL MACROECONOMICS

• Foreign Exchange Markets (FXM)
  • Spot Exchange;
  • Forward Exchange
  • Example
• Payments Among Nations
  • The Balance of Payments (BOP)
    • BOP Assignment
  • National Income Accounting
• Exchange Rate (XR) Determination Under:
  
  • Flexible (Floating) Exchange Rate System;
  • Fixed Exchange Rate System
• Exchange Arbitrage
  • Example 1
  • Example 2
• Interest Arbitrage
• Interest Parity
• Purchasing Power Parity Hypothesis
• Sample Test Questions

C. INTERNATIONAL MONETARY REGIMES

• The Gold Standard
• The Bretton Woods System
• The Managed Float System
• Exchange Controls
• The International Monetary Fund (IMF)
  • The Quota System

D. INTERNATIONAL TRADE MODELS

• General Equilibrium Analysis
  • Production Possibilities Frontiers (PPF)
  • Indifference Curves
• Partial Equilibrium Analysis
  • Supply
  • Demand
    
• Mercantilism
• The Principle of Absolute Advantage
• The Simple Ricardian Model (The Law of Comparative Advantage)
• Assignment 1
• Assignment 2
• Trade Under Constant Costs
• Trade Under Increasing Costs
• The Heckscher-Ohlin Theorem
• The Leontief Paradox
  • Research Process in Economics
    

E. TRADE, DISTRIBUTION OF INCOME, AND WELFARE

• The Stolper-Samuelson Theorem
• The Factor Price Equalization Theorem
• North-South Trade

F. ALTERNATIVE TRADE THEORIES

• Intra-Industry Trade
• The Product Life Cycle Theory
• The Similarity of Preferences Theory

G. TRADE, ECONOMIC GROWTH, AND FACTOR MOBILITY

• Economic Growth
  • Effects of Neutral Economic Growth on Trade
  • Effects of Antitrade Biased Growth on Trade
  • Effects of Protrade Biased Growth on Trade
• The Rybczynski Theorem
• Immiserizing Growth and the Dutch Disease
• Inter-Country Mobility of Labor

H. COMMERCIAL POLICIES

• Tariffs
  • Assignment One
• The Effective Rate of Protection (E)
• Non-Tariff Trade Barriers (NTBs)
  • Import Quotas
  • Voluntary Export Restraints (VERs)
• Tariffs vs. Quotas
• Unfair Trade Practices
  • Export Subsidies and Countervailing Duties
  • Dumping

I. ARGUMENTS FOR TRADE RESTRICTION

• The Infant-Industry Argument
• Monopoly-Based Arguments
• The Second-Best Arguments
• National Security and Defense
• Adjustment Costs and Trade Adjustment Assistance

J. TRADE LIBERALIZATION

• The GATT and the WTO
• Economic Integration and Regional Trading

TEXTBOOK:

Mordechai E. Kreinin, INTERNATIONAL ECONOMICS, A Policy Approach, Pearson Learning Solutions, Boston, MA, 2010

YOU MUST BRING YOUR BOOKS TO CLASS. PLEASE!

GRADE POLICY:

Your grades will be based on the accumulated total of your scores on the following:

2 EXAMs @ 100 Points Each, 200 Points

Assignments ( In-Class Only ): 20 Points

FINAL EXAM: 100 Points

Monday, May 4, 10:15 am - 12:15 pm

TOTAL 320 Points

NOTE 1:

No exam grades will be eliminated. No exams will be made up unless arrangements have been made PRIOR TO THE SCHEDULED EXAM DATE. Messages left on my voice mail will not be considered as proper arrangements.

NOTE 2:

Academic integrity - Students are expected to maintain principles of academic integrity and conduct as defined in EIU's Code of Conduct (http://www.eiu.edu/judicial/studentconductcode.hph). Violations will be reported to the Office of Student Standards.

NOTE 3:

Students with disabilities - If you are a student with a documented disability in need of accommodations to fully participate in this class, please contact the Office of Student Disability Services (OSDS). All accommodations must be approved through OSDS. Please stop by Ninth Street Hall, Room 2006, or call 217-581-6583.

NOTE 4:

The Student Success Center - Students who are having difficulty achieving their academic goals are encouraged to contact the Student Success Center (http;//www.eiu.edu/~success) for assistance with time management, test taking, note taking, avoiding procrastination, setting goals, and other skills to support academic achievement. The Student Success Center provides individualized consultations. To make an appointment, call 217-581-6696, or go to 9th Street Hall, Room 1302.

NOTE 5:

"Each faculty member has the authority to establish the conditions for student cell phone use in his/her classroom. These conditions are at the discretion of the faculty member, but will provide that a university-initiated campus security text message can be received and disseminated to those in the classroom in a timly manner." Eastern position on cell phones in classrooms.

My position on cell phones: there is absolutely NO TEXTING allowed in class, you may NOT hold your cell phones in your hands in class, and you may NOT use your cell phones as calculators during exams.

SPECIAL DATES IN THE SPRING TERM 2020 CALENDAR

Classes Begin: January 13, 2020

Martin Luther King Jr. Day Observance-No Classes: January 20

Last Day to Drop a Course With No Grade: January 27

W for Course Withdrawal Beings: January 28

Lincoln's Birthday Observed, February 14

Mid Term: March 5

Spring Recess: March 16 - 20

Last Day to Withdraw from a Course or University: April 3

Last Class Day: May 1

Final Examinations: May 4 - 8

Deadline to Return Books/TRS/No Fine 3 p.m.: May 8

Commencement: May 9