338syll 04/10/03
Course Syllabus
ECO 338 International Economics
Instructor:
Office:
Mailing Address:
Dr. Roger Even Bove
317D Anderson Hall
Economics & Finance Department
West Chester University
West Chester, PA 19383-2220
Office Telephone: (610) 436-2134(email is checked more
often)
Email:
rbove@wcupa.edu
Website:
http://courses.wcupa.edu/rbove/eco338/338key.html
Check this at least once a week for exam hours,
problem solutions, changes in office hours, etc. This
site is also accessible through Blackboard.
Office Hours:
To be entered
You are encouraged to disregard these hours and
come in at your convenience in the afternoon without
an appointment. (Call in advance to be sure that I
am in my office.)
Required Texts:
Thomas A. Pugel, International Economics, 12th edition, Irwin, 2004, ISBN 007-248748-8
Study guide for Thomas A. Pugel, International Economics, 12th edition, Irwin,
2004, ISBN ?
Robert M. Jackson, ed., Annual Editions: Global Issues 03/04,
Dushkin/McGraw Hill, 2003, ISBN ?
Course Description:
A descriptive, analytic and institutional examination of international trade,
financial and other economic relationships, and the effects of public policy on
these telationships and economic welfare. This course will teach and apply both
Macro-and Microeconomics.
As the United States becomes increasingly linked to the world economy the
importance of understanding the workings of the world trade and monetary
system will increase. This course attempts to give an exposition of contemporary
issues and theory that will enable the student, as a citizen, to evaluate proposals
for changing the international system.
Prerequisites:
Economics 111 and 112 or the equivalent.
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Evaluation Policy:
Student progress in this course is determined primarily by grades on two hour
exams and a paper. The final exam will be one-third of the grade. The other
assignments will be equally weighted. Grading will be on a curve based on
numerical scores from these exercises. Regular class attendance and
participation is expected and a pattern of absences will be penalized.
Examination
Policy:
University policy is that there is no excused absence from a
scheduled examination. Therefore, a scheduled and pre-announced
exam which is missed will not be made up, and a grade of an F will
be recorded, with the limited exception of cases in which the
absence is wholly involuntary and unavoidable, and the reason for
which is documented by evidence, which can be verified by the
instructor. Practically speaking, such cases normally include only
illness attended by a physician or nurse, and unavoidable absence
on official University business. Not included would be absences
due to “oversleeping”, “change in outside schedule”, “job
interview”, “extracurricular club or organization events, “car
wouldn’t start”, etc.... If any make-up exams are given. they will
generally be scheduled for some time during the last week of the
semester. Nevertheless, please talk to the instructor about any such
situation.
However, if you must be absent from an exam, see the instructor,
preferably in advance.
Economics and Finance Department Policies:
Class Cancellation Policy: In the event that the instructor cancels a class, you will be notified by a note
posted on the classroom door and signed by the department chair. If there is any uncertainty, check with the
department secretary in Anderson 309.
Accommodations: We at West Chester University wish to make accommodations for persons with
disabilities. Please make your needs known by contacting me and/or the Office of Services for Students with
Disabilities at ext. 3217. Sufficient notice is needed in order to make the accommodations possible. The
University desires to comply with the ADA of 1990.”
Academic Dishonesty: Academic dishonesty is prohibited and violations may result in discipline up to and
including expulsion from the University. Academic dishonesty includes but is not limited to academic
cheating, plagiarism, the sale purchase or exchange of term papers or research papers; falsification of
information which includes any form of providing false or misleading information, written, electronic or
oral. Plagiarism is defined as copying another's work or portions thereof and/or using ideas and concepts of
another and presenting them as one's own without giving proper credit to the source.
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Nondiscrimination/Affirmative Action Policy: West Chester University is committed to providing
leadership in extending equal opportunities to all individuals. Accordingly, the University will continue to
make every effort to provide these rights to all persons regardless of race, religion, sex, national origin,
ancestry, age, marital status, sexual orientation, disability, or veteran status. This policy applies to all
members of the University community, including students, staff, and administrators. It also applies to all
applicants for admission or employment and all participants in University-sponsored activities. Any
individual having suggestions, problems, complaints or grievances with regard to equal opportunity or
affirmative action is encouraged to contact the Director of Social Equity, 13/15 University Avenue, 610436-2433.
Sexual Harassment Policy: West Chester University is committed to equality of opportunity and freedom
from discrimination for all its students and employees. Based on this commitment and the recognition that
sexual harassment is a form of discrimination, which is of a growing concern to the higher education
community, the University provides the following policy:
Harassment on the basis of sex is a violation of Title VII of the U.S. Civil Rights Act, Title IX of the
Educational Amendments of 1972, and of the Pennsylvania Human Relations Act. Because West Chester
University is committed to establishing an environment free from discrimination and harassment, sexual
harassment will not be tolerated in any form. Upon official filing of a complaint, immediate investigation
will be made culminating in appropriate corrective action when warranted which may include termination of
the relationship with the University.
Sexual harassment is defined as unwelcome sexual advances, requests for sexual favors, or other verbal or
physical conduct of a sexual nature occurring when: 1. submission to such conduct is made either explicitly
or implicitly a term of an individual’s employment, or of a student’s academic status or treatment; 2.
submission to or rejection of such conduct by an individual is used as the basis of academic or employment
decisions affecting such an individual; or 3. such conduct has the purpose or effect of unreasonable
interfering with an individual’s extracurricular activities, work, or academic performance or creating an
intimidating, hostile, or offensive living, working, or academic environment. A complete copy of the
University’s Sexual Harassment Policy document, inclusive of the Sexual Harassment Complaint
Procedure, may be obtained from the Office of Social Equity.
Individuals who believe themselves to be victims of sexual harassment, or who have questions about the
University’s policy on this matter should contact the Director of Social Equity, 13/15 University Avenue,
610-436-2433.
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Student Learning Objectives
The Theory of International Trade
Why do nations Trade?
Be able to draw Supply and Demand curves for a good and show how they are changed
by availability of International Trade.
Be able to explain what is meant by absolute and comparative advantage in a good.
Be able to draw and use production-possibility curves with constant and increasing
marginal costs.
Be able to explain community indifference curves and how they interact with
production-possibility curves to explain trade.
Be able to explain the meaning of Heckscher-Ohlin trade theory and the major
challenges to it.
Understand some more modern explanations of trade such as intraindustry trade,
economies of scale and effects of imperfect competition.
How do we describe international monetary transactions?
Be able to describe the balance of payment accounts
Know what transactions cause credits or debits in the BOP accounts.
Understand the major kinds of flow in the BOP accounts and where typical transactions
fit into them.
Know how movements in the Balance of Payments affect the domestic macroeconomy.
Understand the basics of operation of foreign exchange markets including forward
markets.
Understand hedging and the effect of interest rates on forward markets.
Know what is meant by purchasing-power parity
Explain the operation of the gold standard and floating and fixed exchange rates
Why do countries restrict trade?
Know the major arguments for tariffs and quotas and be able to discuss their validity.
Be able to use supply and demand curves to show the effects of quotas and tariffs on
single –product markets.
Be able to describe other methods of restricting trade and their effects.
Where did we get our current international monetary system and what are its defects?
Know what is meant by the Bretton Woods system – The IMF, World Bank etc.
Explain how the pegged rates of the Bretton Woods system broke down and what has
replaced it.
Begin to understand the present problems of the system and be able to describe some
major recent crises and how they were resolved.
Know what dollarization means and how it affects the US and the rest of the world.
Be able to explain some of the proposals to ‘fix’ the system.
What has been the American attitude to international trade and how has it evolved?
Know how dominant attitudes changed from predominantly protectionist to
internationalist as the nation evolved.
Understand some of the effects of the Great Depression and World War II on trade.
Explain the development of major trade blocks like the EU and NAFTA.
Be able to explain how WTO came to be and what it has accomplished.
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How are international trade and factor movements affecting the world economy?
Explain the advantages of the multinational corporation and the importance of foreign
direct investment.
Know the reasons why people migrate and the effect of migration on sending and
receiving countries.
Be able to explain why so much of the world is opposed to ‘Globalization.’
Know about the relationship of growth on the environment and how the international
community is responding to threats to the environment.
Fulfillment of Department Objectives
1. Critical Thinking: International Economics is inherently controversial. Students must form
intelligent opinions about such issues as restraints to trade, intellectual property, migration and
globalization. Exam questions, sometimes prepared, ask students to take a position and defend it with facts
and theories learned in the course.
2. Problem solving and Quantitative skills: Students are expected to understand and draw graphs in
the theory of international trade and the analysis of restraints to trade. Algebraic models and graphs are used
to teach the macroeconomic aspects of the course and students are expected to be able to manipulate these
models.
3. Communication Skills: All assignments are expected to be presented in clear business English.
In addition to a paper all exams have essay questions.
4. Research skills: Students are required to write a research paper, which must be presented in
outline and two drafts. They are expected to do a literature search on the topic and discuss the literature.
Data should be assembled and presented as appropriate.
5. Technology skills: All written assignments should be typed using standard word processing
packages. Data should be presented using Excel spreadsheets and students are encouraged to use standard
statistical packages to analyze data.
6. Understanding of the legal, regulatory and ethical environment of business: International
Economics, especially our national rights, obligations and goals in treaties involving exports, imports and
the environment are essential to understanding the environment of business.
7. Theoretical and practical knowledge in Microeconomics and Macroeconomics: The course, as
currently structured, alternates between applied Microeconomics and Macroeconomics.
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COURSE OUTLINE AND READING ASSIGNMENTS
‘Pugel’ refers to both text and study guide. Please read all chapter appendices. Additional readings may
be assigned. ‘GI’ refers to Annual Editions: Global Issues 03/04 .
I.
Topic
Introduction
A. The Diversity of Nations
B. Trends in International Dependence
C. The Theory of Trade
II.
III.
International Payments
A. The Sources of Payments
B. The Balance of Payments
C. The Foreign Exchange Markets
D. Exchange Systems and the
Macroeconomy.
Restrictions on Trade
A. Static Arguments for Tariffs
B. Dynamic Arguments for Tariffs
C. Analysis of Tariffs
D. Quotas
E. Exchange Control
Chapters
Pugel Ch. 1
GI to be determined
Pugel Ch. 2-6
3 weeks
Pugel Ch. 15
Pugel Ch. 15
Pugel Ch. 16-19
Pugel Ch. 21-23
2 weeks
Pugel Ch. 9
Pugel Ch. 7
Pugel Ch. 8,10
Pugel pp 493-4
IV.
The International Monetary System
A. Bretton Woods
Pugel Ch. 19
B. The IMF
Pugel Ch. 20
C. The World Bank Group
Pugel Ch. 20
D. U.S. Policy Toward the
International Monetary System Pugel Ch. 20
E. Current Problems
Pugel Ch. 20
F. Reform Issues
Pugel Ch. 24
V.
Commercial Policy
A. Mercantilism
B. Free Trade
C. U.S. 1780-1940
D. The Breakdown of Trade
E. The Movement to Multilateralism
VI.
Week Beginning
5 weeks
1 week
1 week
Pugel Ch. 10
GI to be determined
F. Economic Integration
Pugel Ch. 11
Trade and Development.
A. Multinational Enterprises
B. Backwash
C. Investment and Aid
D .Migration
E. Environment
F. Globalization
Pugel Ch. 14
Pugel Ch. 13. GI to be determined
GI to be determined
Pugel Ch. 14
Pugel Ch. 12
GI to be determined
2 weeks
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