International Economics - Economics 3891 Honors
N. Brodsky, Instructor
Text: The World Economy, 7th edition, Yarbrough, Beth V. and Robert M. Yarbrough, Thomson Southwestern, USA, 2006.
Note: The numbers that appear on the left side of the titles refer to chapter and pages in the text. The pages identify areas to read carefully in; other areas remain important, and will be noted in class.
II. The Theory of International Trade: Demand and Supply
2. (p. 27) Adam Smith and Absolute Advantage
2. (p. 28) David Ricardo and Comparative Advantage
2. (p. 35-40) The Gains from Trade
3. (p. 52-69) The Heckscher-Ohlin (Neoclassical) Theory
10. (p. 285-88) The Rybczynski Theorem (Economic Growth I)
4. (p. 81-85) The Stolper-Samuelson Theorem
4. (p. 85-91) The Factor Price Equalization Theorem
11. (p. 332-335) Import-Substitution Development Strategies
11. (p. 335) Primary-Export-Led Development Strategies
10. (p. 288-89) Immizerizing Growth
****** EXAM 1 ******
III. Trade Policy
6. (p. 145-52) What Happens When a Small Country Imposes a Tariff?
6. (p. 152-55) The Effects of a Tariff
8. (p. 212-16,226-32) Arguments for Protection
6. (p. 156-59) What Happens When a Large Country Imposes a Tariff? (The Optimal Tariff)
6. (p. 160-63) The Effective Rate of Protection
9. (p. 251-73) Efforts at integration: Success and Failure (The EU and NAFTA)
IV. Currency Markets and Exchange Rates
13. (p. 368) What's in the Balance of Payments Accounts
12. (p. 370-78) The Foreign Exchange Market - Spot Rates
12. (p. 376-77) The Foreign Exchange Market - Arbitrage
12. (p. 378-79) Buying Currency Now for Delivery Later - Forward Rates
12. (p. 379-86) Interest Parity
18. (p. 593-95) Absolute Purchasing Power Parity
18. (p. 595-600) Relative Purchasing Power Parity
18. (p. 596-7) Empirical Evidence on PPP
****** EXAM 2 ******
12. (p. 387-94) Demand and Supply in the Foreign Exchange Market
20. (p. 658-701) The Fixed-versus-Flexible Debate
16. (p. 516-18) Macroeconomic Goals in an Open Economy?
***** FINAL EXAM (comprehensive)*****
INTERNATIONAL ECONOMICS Instructor: Noel Brodsky
Economics 3891 Honors Office: 2831 (215D) Coleman Hall
Fall 2007 Phone: 581-6334
Hours: 1:00pm-2:00pm MWF
or by Appointment
2 Regular Exams (100 points each) = 200 points
2 Article Summaries (Word Processed - 20 points) = 20 points
Summary 1, 10 points, Summary 2 10 points
1 Internet assignment - 5 points) = 5 points
1 Term Paper = 50 points
1 Final Exam (cumulative) = 100 points
Total 375 points
Expected Grade Distribution and Curve Structure:
Curve Structure: Average exam score will be set at or near a baseline "B", whenever necessary. Each exam has its own curve, absolutely determined one week after the exam is returned.
The Cutoffs are as follows:
88% = A, 77% = B, 66% = C, 55% = D, below 55% is an F
The article summaries will be a short (1 page, double spaced not including graphics) evaluation of a current situation relating to International Trade or International Finance. . Current means the paper must analyze an article dated from this semester (August, September, October or November, 2007). The summaries must note relevant economic analysis of the article. Lack of economic analysis or an international economic topic is an automatic 0 grade for the summary. The summary must include an attached copy of the article being summarized.
The summaries must utilize a word processor, done by the student turning in the paper in for his or her grade. Failure to do this will result in a failing grade for the paper. The summaries may be turned in on the Monday following the Friday due date, with the loss of 2 letter grades, each day thereafter, one letter grade is lost. The articles must come from print media, not Internet sources. Good sources for these summaries include: The Wall Street Journal, Fortune, Business Week, Barrons. Under no circumstances should you copy any other person's work, and you must cite all sources.
Internet Assignment: Go to the homepage of Noel Brodsky: http://www.eiu.edu/~econinfo your internet assignment will be found there, as well as its due date. Optionally, you may complete the 5 assignments to introduce you to the Internet, and the 3 advanced assignments to build a homepage, though no credit will be given for them. You are required to have your own university student account, your name must be on it. All Internet correspondence to me must be on that account. . Under no circumstances should you copy any other person's work.
Term Paper: You may choose between two options: (1) A country analysis, which comprises a brief history of the country, its major exports and imports, its exchange regime, and its prospects for the next 10 years, or (2) identify a major strand in international economics literature in which you summarize and connect at least 5 published papers in professional journals. The expected length of this paper is 10-15 pages, and it will be due December 3, 2007.
Make-Up Exams: There must be a very compelling reason to be granted a make-up exam, which, if at all possible, should be arranged in advance. I do not intend to give make-up exams, if I can avoid it.
If you have a documented disability, and wish to discuss academic accommodations, please contact me as soon as possible.
Summary due dates:
(1) Friday, October 19, 2007 at 3:00pm
(2) Friday, November 16, 2007 at 3:00 pm