ECN3860, INTERNATIONAL ECONOMICS

Dr. ALI R. MOSHTAGH

2605 COLEMAN HALL

(217) 581 - 2719

DEPARTMENT OF ECONOMICS

amoshtagh@eiu.edu

OFFICE HOURS: 11:00 - 11:50 a.m. M W F and 8:30 - 9:20 a.m. T R

COURSE DESCRIPTION:

Principles of foreign trade and finance; balance of payments; tariffs; quotas and commercial policies of major countries.

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 2, 2011, 2:45 - 4:45 pm

TOTAL 320 Points

NOTE 1:

No EXAM grades will be eliminated. No EXAMs will be made up unless proper arrangements have been made prior to the scheduled EXAM date.

NOTE 2:

If you have a documented disability and wish to receive academic accommodations, please contact the Coordinator of the Office of Disability Services (581-6583) as soon as possible.

NOTE 3:

"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.

SPECIAL DATES IN THE SPRING TERM 2011 CALENDAR

Classes Begin: January 10, 2011

M.L. King's Brithday Observance-No Classes: January 17

Last Day to Drop a Course With No Grade: January 24

W for Course Withdrawal Beings: January 25

Lincoln's Birthday Observance-No Classes: February 11

Mid Term: March 3

Spring Recess: March 14 - 18

Last Day to Withdraw from a Course or University: April 1

Final Examinations: May 2 - 6

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