Approved by Faculty Senate

Department or Program: Economics

Course Number: 404

Semester Hours: 3

Frequency of Offering: Once every other year.

Course Title: International Economics

Catalog Description: Comparative advantage and modern trade theories. The impact of international trade on income distribution and growth, barriers to trade, economic integration, contemporary international trade agreements, exchange rate determination and balance of payments adjustments.

This is an existing course previously approved by A2C2: Yes

This is a new course approval: No

University Studies Approval is requested in: Unity and Diversity: Global perspective.

Contact person: Alex Gallegos, (457-5469, agallegos@winona.edu)

Attachments: A copy of a syllabus is attached. This is the syllabus that the faculty member that normally teaches this course uses. The parts of the course that address the outcomes for global perspectives are pointed out.

Global Perspectives

These courses must include requirements and learning activities that promote students' abilities to:

  1. understand the role of the world citizen and the responsibility world citizens share for their common global future.

    This course analyzes the impact of international trade on the well being of nations and groups of individuals within nations. Indeed, citizens of the world today share a common global future. The decision on the part of American companies to buy or sell in international markets affects no only their stockholders and workers but the owners and workers of other companies both foreign and American, not to mention consumers in different countries.

    Students in this course learn to ascertain the benefits of free trade for all countries involved. As a learning activity, students can select a country and study its trade flows (imports and exports) during a certain period and determine the impact of trade on the different sectors of that country's economy and society.

  2. describe and analyze social, economic, political, spiritual or environmental elements that influence the relations between living beings and their environments or between societies.

    The composition of trade, that is, the types goods and services a country buys or sells, is influenced by its physical environment, its economic dynamism, and its social and political institutions. It used to be that the physical environment was the main determinant of the composition of trade flows. That is no longer the case. As demonstrated by the case of Japan and, more recently, by the example of other Asian countries, trade is now heavily influenced by the dynamic nature of economies that are constantly introducing new products and new processes. Trade is also aided by appropriate social and political structures.

    Students learn in this course to identify efficient trade patterns and to evaluate the cost of protectionism. As a learning activity they can quantify the impact of trade barriers such as tariffs, quotas, voluntary export restraints, etc. for different countries and periods of time.

  3. Identify and analyze specific global issues, illustrating the social, economic, political, spiritual, or environmental differences that may affect their resolution.

One of the current issues is the distribution of economic power. The United States' position as the world's economic superpower seems threatened by the prospects of a unified Europe and an integrated league of Asian nations. Many countries, both developing and developed, are seeking some degree of economic integration. There may be some changes in the structure of economic power in the not so distant future.

International economics students learn to analyze economic integration both from a historical and from an analytical perspective. They are able to describe different types of economic blocs such as the European Union, the North American Free Trade Agreement, MERCOSUR, etc. They can also analyze the impact of these agreements on member countries and

3

 

on other countries that had economic relationships with individual counties that are no longer possible. As a learning activity they are asked to determine the reasons why some international economic agreements have been successful while many others have not.

 

INTERNATIONAL ECONOMICS
(Economics 404)
Syllabus

  1.  Instructor

Instructor's Name

Instructor's Office

Instructor's Phone Number

Instructor's e-mail address

  1. Office hours

M 3:00-5:00

W 10:00-12:00 & 2:00-5:00

H 10:00-12:00 & 3:00-4:00

And by appointment

 

  1. Textbook

International Economics

Lindert & Pugel

Eleventh Edition

Irwin, 2000

 

  1. Course description

Your International Economics course will consist of two parts: what is called the pure theory of international trade, and international finance. The first one deals with the flows of goods and services between nations and the second one with the financial aspects of the exchange of goods and services, i. e. with exchange rates, capital flows, and the balance of payments. If time permits, the last part of the term will be devoted to macroeconomics of the open economy.

  

5. Class participation

I expect a lot of interaction during the class period. Although if would be helpful for you to read the material in advance, class participation willnot emphasize that aspect. What I expect students to do is to follow the exposition/discussion, ask questions, provide answers, and bring up current events related to the topic under discussion. It will be to your advantage to actively participate in the learning process.

 

Student-faculty contact. I encourage student-faculty contact. I will meet individually with each of the teams formed to work on the project describe below and I am always willing to meet individually with students to provide explanations they may need or discuss any concerns they may have. Please take advantage of the office hours mentioned above or make appointments to see me. You can also call me or e-mail me.

 

Time on task. You should plan on devoting an average of six hours a week to this class. Other than attending the schedule class meetings, you will have to do:

 

Exams. There will be two exams, one for the trade part and one for the finance part. The open macroeconomics topic will be included in the second exam. The second exam will be the final exam and will not be cumulative.

Assignments. There will be two types: in-class and homework assignments. They both will be scored and incorporated in your final grade.

A project. A term paper will be required for this class. It will be a team project that will encourage cooperation with other students. See the guidelines below.

A journal. There will be some material assigned from The Wall Street Journal. This material will be included in your assignments, your exams, or both. Besides, you will have to keep a journal in which summaries of articles related to the value of the dollar, the yen and the mark, to trade and payments issues and to the European Community, will be entered. Your summeries should be typed and handed in every Monday, starting on January 15.

All this parts of the course will influence your final grade in the way indicated below. The

purpose of this grading scheme is to recognize and value the diverse talents and different ways of learning students have.

Makeups. There will be no makeups of any kind, except in unusual circumstances. Students requiesting a makeup wil be asked to clearly justify their absences. Late assignments will only be accepted "at a discount". Being absent from a particular class meeting is not an acceptable excuse to hand in assignments late. Assignments are due during the class period.

 

Feedback. You can expect prompt feedback. Your assignments will be scored and returned the next class meeting, as a general rule.

 

General expectations. This is a senior level course and I have high expectations of students that decide to enroll in it. I expect quality work in all the part of the course. No academic dishonesty will be tolerated. A zero grade will be assigned to that part of the course in which dishonesty is discovered.

  

  1. Grading guidelines

    Weights: Exam 1, 20%

    Assignments, 10%

    Journal, 10%

    Project, 30%

    Final Exam, 30%

    Scale: 90 % and higher, A

    80%-89%, B

    70%-79%, C

    60%-69%, D

    59% and lower, F

  2. University studies global perspectives

This course includes requirements and learning activities that promote student's abilities to:

    1. understand the role of the world citizen and the responsibility world citizens share for their common global future;
    2. describe and analyze social, economic, political, spiritual or environmental elements that influence the relations between living beings and their environments or between societies;
    3. Identify and analyze specific global issues, illustrating the social, economic, political, spiritual, or environmental differences that may affect their resolution.

 

  1. Topics

International Trade

1. Trade theories: The global benefits of international trade (Chapters 2,3 & 6) (a, b)

      1. Early contributions
      2. Absolute advantage
      3. Comparative advantage
      4. Factor proportions
      5. Modern theories

2. Gains from trade (Chapter 4) (a, b)

2.1 Short and long run effects

2.2 The Stolper-Samuelson Theorem

2.3The Specialized Factor Pattern

2.4 The Factor-Price Equalization Theorem

2.5 Actual trade patterns

3. Growth and trade (Chapter 5) (b)
3.1 Balanced versus biased growth

      1. Willingness to trade
      2. Terms of trade
      3. Technology and comparative advantage in trade

 

    1. Trade policy (Chapters 7-13)
    1. Tariffs (b)
    2. Non-tariff barriers (b)
    3. Arguments for and against protection (b)
    4. Export promotion (c )
    5. Trade blocs (d)

      a) Regulations and national standards

      b) Social aspects

    6. Trade and the Environment (b, c)
    7. Trade Policies for Developing and Transition Countries (b ,c)
    1. The impact of cultural differences
    2. Sweat shops

 

International Finance

    1. The balance of payments (Chapter 15) (a, b)
    1. Credits and debits
    2. Partial accounts
    3. Overall account
    4. Macroeconomic meaning
    5. International investment position
    1. The foreign exchange market (Chapters 16-20) (a, b)
    1. Currency trading
    2. Demand and supply for foreign exchange
    3. Spot exchange market
    4. Forward exchange market
    1. Interest parity
    1. Exchange rate determination
    2. Government policies

 

Open Macroeconomics

    1. Macroeconomics for open economies (Chapter 21-24) (a, b)

 

 

PROJECT GUIDELINES (a, b, c)

 

  1. Your paper should include at least the following parts:
    1. Cover page with the paper title …………………………………………… [ 5]
    2. Table of contents with pages ……………………………………………… [10]
    3. Introduction stating the purpose of the paper …………………………… [15]
    4. Text with subtitles (5-10 double spaced pages)

d.1) Description of the issues you will deal with ……………………. [10]

d.2) Use of theoretical models ……………………………………….. [20]

    1. Tables with statistical information/graphs ……………………………….. [10]
    2. Conclusions ………………………………………………………………….. [20]
    3. Alphabetized bibliography ………………………………………………….. [10]

  

  1. The text of the paper should include:
    1. A descriptive part
    2. A theoretical discussion of the topic with the use of a macroeconomic model.
    3. The main points you discovered in your bibliographical research.

d) Analysis of those points, i.e. a discussion of them that should include your team’s

insights.

  1. Your bibliography should consist at least of:
    1. Four articles from non-technical sources (Time, Newsweek, Business Week, The

Economist, etc.)

    1. Four articles from The Wall Street Journal.
    2. Three articles from technical sources like the publications of the Federal Reserve Banks or professional journals (American Economic Review, Journal of International Economics, Journal of Accounting, Journal of Business, etc.)
    3. Two textbooks or books, other than Lindert’s. Principles textbooks are NOT acceptable.

4. Suggested topics:

    1. The US trade deficit
    2. US-Japan (or any other country) trade relations
    3. Protectionism
    4. The US-Canada Free Trade Agreement
    5. The North American Free Trade Agreement (NAFTA)
    6. The value of the dollar (or any other national currency)
    7. European economic integration
    8. The Asian crisis.
    9. The euro

  1. Deadlines
    1. Teams formed, January 19.
    2. Topic proposal, description of the purpose of the paper, main point to investigate, January 24..
    3. Initial literature review, classified list of sources [in the four categories mentioned in 3, above], and initial outline, February 9.
    4. Selection of specific sources (still classified) for each section of your outline and final outline, February 26.
    5. First draft, March 23.
    6. Final draft, April 23.
  1. Suggestions
    1. Do not simply xerox tables or graphs and include them in your paper. Use a PC.
    2. Whenever you mention figures in the text of the paper, give the source in a footnote.
    3. Tables and graphs should all have a source, unless the graphs are part of a theoretical model.
    4. Do not present your bibliography classified in the final draft of your paper.
    5. Your conclusions should be supported by the analysis you do.