Yonsei University
Graduate School of International Studies
International Economics
Fall 2006
Lectures: /
New Millennium Hall
Professor: Jeong Yeon LEE
Office: 602 New Millennium Hall
E-mail: leejy@yonsei.ac.kr
Office Hours:
Teaching Assistant:
E-mail:
Course Prerequisites
Course(s) on the principles of economics
Course Description
This is an introductory course in international economics.
It aims to provide an
analytical framework for evaluating issues relating to international trade and finance.
Topics include the theory of international trade, free trade and protectionism, balance
of payments, exchange rate theory and regimes, and open-economy macroeconomics.
Throughout the semester, the goal of the class is to stress concepts and their
application rather than theoretical formalism.
Required Text
Krugman, Paul R., and Maurice Obstfeld (2006), International Economics: Theory and
Policy, Seventh edition, Addison-Wesley [KO].
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Course Requirements
1.
Class Participation: Active class participation is important. For several subject
matters, students will be given opportunities to provide an outline and lead
class discussion throughout the semester. Students are strongly encouraged to
take advantage of these opportunities.
2.
Group Presentation: Students are expected to form groups of three students
and make a presentation on a current issue in international economics.
Presentations should last about 20 minutes. Each presentation should be
supported by a five-page policy memo (excluding references, graphs, and
tables). Please complete your memos independently. The final version of the
policy memo is due on June 13, 2006.
3.
Midterm Exam: The exam will be in-class and closed-book. It will take place
during class time on
4.
April 25, 2006.
Final Exam: The exam will be in-class and closed-book. It will cover the entire
material presented in lectures and covered in required readings. It will take
place during class time on June 15, 2006 (Tentative).
Class Participation
20%
Group Presentation
20%
Midterm Exam
20%
Final Exam
40%
Tentative Course Outline
* indicates required reading
1. Introduction
*KO, Chapter 1
*The Economist, “Time to deliver the goods,” January 6, 2005
International Trade Theory
2. Labor Productivity and Comparative Advantage: The Ricardian Model
*KO, Chapter 3, pp. 24-40, 45-48
*The Economist, “The miracle of trade,” January 27, 1996
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3. Resources and Trade: The Heckscher-Ohlin Model
*KO, Chapter 4, pp. 50-68, 71-77
*The Economist, “Trade and wages,” December 7, 1996
4. The Standard Trade Model
*KO, Chapter 5, pp. 84-89
5. Economies of Scale, Imperfect Competition and International Trade
*KO, Chapter 6
*The Economist, “Survey on world trade: Why trade is good for you,”
October 1, 1998
*The Economist, “The dumping dilemma,” May 30, 2002
Helpman, E. (1999), “The structure of foreign trade,” Journal of Economic
Perspectives, 13 (2), 121-144.
International Trade Policy
6. Instruments of Trade policy
*KO, Chapter 8
7. Political Economy of Trade Policy
*KO, Chapter 9, pp. 207-222
Krugman, P. R. (1987), “Is free trade passe?” Journal of Economic
Perspectives, 1 (2), 131-144.
8. Trade Policy in Practice
*KO, Chapter 9, pp. 223-237
*The Economist, “Trade’s bounty,” December 2, 2004
*The Economist, “Special report: Offshoring. Relocating the back office,”
December 11, 2003
*The Economist, “Delivering on Doha’s promise,” January 6, 2005
*The Economist, “Survey on globalization: Who elected the WTO?”
September 27, 2001
*The Economist, “Weighing up the WTO,” November 21, 2002.
*The Economist, “Special report: Ten years of NAFTA. Free trade on
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trial,” December 30, 2003
Krueger, A. O. (1999), “Are preferential trading arrangements tradeliberalizing or protectionist?” Journal of Economic Perspectives, 13 (4),
105-124.
Bhagwati, J., A. Panagariya, and T. N. Srinivasan (2004), “The muddles
over outsourcing,” Journal of Economic Perspectives, 18 (4), 93-104
Exchange Rates and Open-Economy Macroeconomics
9. National Income Accounting and the Balance of Payments
*KO, Chapter 12
*The Economist, “Economic focus: stop worrying and love the deficit,”
November 27, 2003
The Economist, “Economic focus: Checking the depth gauge,” November
11, 2004
Mann, C. L. (2002), “Perspectives on the U.S. current account deficit and
sustainability,” Journal of Economic Perspectives, 16 (3), 131-152.
10. Exchange Rates and the Foreign Exchange Market: An Asset Approach
*KO, Chapter 13
*The Economist, “Free for all,” December 9, 2004
Taylor, M. P. (1995), “The economics of exchange rates,” Journal of
Economic Literature, XXXIII (1), 13-47.
11. Money, Interest Rates, and Exchange Rates
*KO, Chapter 14
Dornbusch, R. (1976), “Expectations and exchange rate dynamics,” Journal
of Political Economy, 84 (December), 1161-1176.
12. Price Levels and Exchange Rates in the Long Run
*KO, Chapter 15
*The Economist, “Food for thought,” May 27, 2004
Taylor, A. M., and M. P. Taylor (2004), “The purchasing power parity
debate,” Journal of Economic Perspectives, 18 (4), 135-158.
13. Fixed and Flexible Exchange Rates and Short-Run Macroeconomic Performance
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*KO, Chapter 16 and 17
*The Economist, “Economic focus: fix or float,” September 13, 2003
*The Economist, “Cock-a-doodle-doo,” February 3, 2005
*The Economist, “Special report: The passing of the buck?” December 4,
2004
*The Economist, “Economic focus: dollar mad?” October 25, 2001
Obstfeld, M., and K. Rogoff (1995), “The mirage of fixed exchange rates,”
Journal of Economic Perspectives, 9 (4), 73-96.
Calvo, G. A., and F. S. Mishkin (2003), “The mirage of exchange rate
regimes
for
emerging
market
economies,”
Journal
of
Economic
Perspectives, 17 (4), 99-118.
International Macroeconomic Policy
14. The International Monetary System, 1870-1973
*KO, Chapter 18
Eichengreen, B. (2004), “Global imbalances and the lessons of Bretton
Woods,” NBER Working Paper 10497.
15. Macroeconomic Policy and Coordination under Floating Exchange Rates
*KO, Chapter 19
*The Economist, “Special report: the IMF. Doubts inside the barricades,”
September 28, 2002
*The Economist, “Rogoff: The sisters at 60,” July 22, 2004
Dooley, M. P., D. Folkerts-Landau, and P. Garber (2003), “An essay on the
revised Bretton Woods system,” NBER Working Paper 9971.
16. Global Capital Markets
*KO, Chapter 21
*The Economist, “Economic focus: managing the world economy,” August
1, 2002
*The Economist, “Economic focus: a better way to go bust,” January 30,
2003
*The Economist, “Economic focus: a remedy for financial turbulence?”
April 15, 2004
Mishkin, F. S. (1999), “Global financial instability: framework, events,
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issues,” Journal of Economic Perspectives, 13 (4), 3-20.
Sebastian, E. (1999), “How effective are capital controls?” Journal of
Economic Perspectives, 13 (4), 65-84.
Eichengreen, B. (2003), “Restructuring sovereign debt,” Journal of
Economic Perspectives, 17 (4), 75-98.
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