Economics 433:
Advanced International Trade
Fall, 2006
Professor: James Tybout
E-mail: jtybout@psu.edu
Office: 517
Phone:
865-4259
Office hours:
Tuesday
4-5 PM,
Wednesday 1:30-2:30 PM
Or by appointment
Office: 409
Office hours: Mondays, 3-5 PM
E-mail:
vcf104@psu.edu
Office hours: Mondays, 1-3 PM, 403 Kern Building
E-mail:
mdg228@psu.edu
Scope of the Course
This
course develops basic theories of international trade and multinational
behavior, and uses them to address policy issues. Applied topics include the
effects of international trade and outsourcing on wages, the causes and
consequences of multinational investments abroad, and the political forces that
shape trade policies. Students are presumed to have taken Economics 302
(Intermediate Micro Theory) and/or Economics 333 (International Economics)
prior to enrollment.
Grades will be based on 4 problem sets (each worth 5 percent), 2 midterm exams (each worth 25 percent) and a comprehensive final exam (worth 30 percent). The midterm exam schedule is:
First
Midterm Exam: Thursday,
October 5
Second
Midterm
Exam:
Tuesday, November 14
Final Tuesday,
December 19, 2:30-4:20 PM, 358 Willard
The textbooks
for this course is:
Additional readings will be
taken from various sources; most are available on line and have been linked to
the reading list below.
Academic Integrity
The ability of
the University to achieve its purposes depends upon the quality and integrity
of the academic work that its faculty, staff and students perform. Academic
freedom can flourish only in a community of scholars which recognizes that
intellectual integrity, with its accompanying rights and responsibilities, lies
at the heart of its mission. Observing basic honesty in one's work, words,
ideas, and actions is a principle to which all members of the community are
required to subscribe.
All course work
by students is to be done on an individual basis unless an instructor clearly
states that an alternative is acceptable. Any reference materials used in the
preparation of any assignment must be explicitly cited. In an examination
setting, unless the instructor gives explicit prior instructions to the
contrary, whether the examination is in-class or take-home, violations of
academic integrity shall consist of any attempt to receive assistance from
written or printed aids, or from any person or papers or electronic devices, or
of any attempt to give assistance, whether the one so doing has completed his
or her own work or not. Other violations include, but are not limited to, any
attempt to gain an unfair advantage in regard to an examination, such as
tampering with a graded exam or claiming another's work to be one's own.
Violations shall
also consist of obtaining or attempting to obtain, previous to any
examinations, copies of the examination papers or the questions to appear
thereon, or to obtain any illegal knowledge of these questions. Lying to the
instructor or purposely misleading any Penn State administrator shall also
constitute a violation of academic integrity.
In cases of a
violation of academic integrity it is the policy of the Department of Economics
to impose the most severe penalties that are consistent with University
guidelines.
For further details on
Missed Exams
There will be no make-up
exams. Those who miss a midterm exam without a valid excuse will receive a zero
for that exam. Those who miss an exam but document a valid excuse for their
absence will receive a course grade based on their remaining course work. The
Economics Department defines valid excuses as follows:
Valid Excuses: During the course many possible situations may arise that would
result in your inability to attend class, attend exams, or perform at a minimally
acceptable level during an examination. Illness or injury, family emergencies,
certain University-approved curricular and extra-curricular activities, and
religious holidays can be legitimate reasons to miss class or to be excused
from a scheduled examination.
In the case of
your own illness or injury, confirmation from a physician, physician’s
assistant, a nurse-practitioner, or a nurse is required. Be advised that
University Health Services cannot provide such verification unless they have
provided treatment and the student authorizes release of information to the
instructor. Further, barring extraordinary circumstances, the confirmation must
be available to the instructor prior to the missed course event.
With regard to
family emergencies, you must provide verifiable documentation of the emergency.
Given the vast array of family emergencies the instructor will provide precise
guidance as to what constitutes adequate documentation. Unless the emergency is
critical you should notify the instructor in advance of your absence from the
scheduled course event. In cases of critical emergencies, you must notify the
instructor within one week of your absence.
For
University-approved curricular and extra-curricular activities, verifiable
documentation is also required. The student should obtain from the unit or
department sponsoring the activity a letter (or class absence form) indicating
the anticipated absence(s). The letter must be presented to the instructor at
least one week prior to the first absence.
In the case of
religious holidays, the student should notify the instructor by the third week
of the course of any potential conflicts.
Disabilities
The Pennsylvania State University encourages qualified people with disabilities to participate in its programs and activities and is committed to the policy that all people shall have equal access to programs, facility, and admissions without regards to personal characteristics not related to ability, performance, or qualifications as determined by University policy or by state or federal authorities. If you anticipate needing any kind of accommodation in this course or have questions about physical access, please tell the instructor as soon as possible.
Announcements
Review session
Monday, Oct. 2, 5 PM in Chambers 111
Professor Tybout
will be out of town Oct. 3 (afternoon) through Oct. 4. Class will end early on
Oct. 3
Veronica Frisancho
will hold extra office hours on Wednesday, Oct. 4, 3-5 PM in her office (409
Kern)
Beginning Monday, Oct. 30, Mark
Gough (grader) will hold weekly office hours 1-3 PM in Kern 413
Review session Monday, November
13, 4:40-5:55 PM, 073 Willard Building
Review session Monday, December
18, 4:30-5:30 PM, 160 Willard Building
Assignments
problem set 1 (Due
problem
set 2 (Due
answers
to second midterm exam
problem
set 3 (Due December 12, 2006)
problem set 3
suggested answers
Practice
problems and old exams
practice
problems 1 practice
problems 1, suggested answers
previous midterm exam 1 answers to previous midterm exam 1
practice problems 2 practice problems 2, suggested answers
previous midterm exam 2 answers to previous midterm exam 2
previous final exam answers to previous final exam
*CFJ, Chapter 1
World
Trade Organization, International Trade Statistics 2003, Ch.I: "World Trade in 2002 -
Overview" and Ch. II: "Selected Long Term Trends," downloaded
Bureau
of Economic
Barba Navaretti, Giorgio and Anthony Venables,
Multinational Firms in the World Economy,
Hummels,
David, Dana Rapoport, and Kei-Mu
Yi. “Vertical Specialization and the Changing Nature of International
Trade,” Economic Policy Review June 1998, 4(2). Online
B. An Overview of Issues
*CFJ, Chapters 2 and 3
*CFJ, Chapters 4, 5, 6 (including appendices)
A.
Tariffs and
Non-Tariff Barriers ( lecture 16 , lecture
17, lecture 18 )
*CFJ, Chapters 10, 13
B. Costs
of Openness; Costs of Protection (
lecture 19 )
*Kletzer, Lori, Job
Loss from Imports: Measuring the Costs,
*Kheir-el-Din, Hanaa, "Implementing
the Agreement on Textiles and Clothing," in P. English, B. Hoekman and A. Matto, eds., Development,
Trade and the WTO (2002)
A. Models
of Fragmentation ( lecture 20
)
*CFJ, Chapter 8
*Bhagwati, Jagdish, Arvind Panagariya, and T.N. Srinivasan, "The Muddles over Outsourcing," Journal
of Economic Perspectives, fall 2004. Online
Barba Navaretti, Giorgio and Anthony Venables,
Multinational Firms in the World Economy,
B. Assessing the Effects of Fragmentation
Freeman,
Richard B., "Are Your Wages Set in
Elliott, Kimberly Ann, "Fin(d)ing Our Way on Trade and Labor Standards," Policy Brief No. 01-5, Institute for International Economics, April 2001. Online
Krugman,
Paul. “Does Third World Growth Hurt
Economic
Policy Institute, "Offshoring," EPI Issue
Guide, June 2004. Online
*Brainard, Lael
and Robert E. Litan, "'Offshoring'
Service Jobs: Bane or Boon and What to Do?" Policy Brief #132,
Brookings Institution, April 2004. Online
Web
site of Academic Consortium on International Trade: Online
A. Trade Theory with Imperfect competition
CFJ, Chapter 7 (we’ll skip this reading)
Markusen, J., J. Melvin, W. Kaempfer and K. Maskus. International
Trade: Theory and Evidence, McGraw-Hill, 1995, pp. 292-300.
B.
Does Strategic Trade Policy Work? ( lecture 21 )
*CFJ, Chapter 12 (including appendix)
*Pavcnik, Nina. "Trade Disputes in the
Commercial Aircraft Industry," The World Economy, May 2002, pp.
733-751 Online
A. When do Multinationals Emerge? ( lecture 22 )
*CFJ, Chapter 9
*Markusen, James. “The Boundaries of the International Enterprise and the Theory of International Trade,” Journal of Economic Perspectives, Spring 1995. (note: only pp. 169-175 are required reading) Online
B. Host
Country Effects of Multinationals ( lecture 23 )
*Deardorff, Alan, Drucilla Brown and Robert Stern. 2004 "The Effects of
Multinational Production on Wages and Working Conditions in Developing
Countries," in Robert Baldwin and Alan Winters, eds., Challenges to
Globalization Chicago: U. Chicago Press. (note:
only pp. 41-51 are required reading) Online
(working paper version)
Barba Navaretti, Giorgio
and Anthony Venables Multinational Firms in the
World Economy,
VII.
GLOBALIZATION: TAKING STock ( lecture 24 )
A. What we have learned from static
analysis
B. Globalization and Growth
*Verrill, Charles Owen, Jr., "An Introduction To Trade Remedies Available Under U.S. Law,"
unpublished "Memorandum to Clients and Friends," April 1, 1999. Online
*Lukas,
Aaron. "Anti-Dumping Law Doesn't Compute",
U.S. International Trade Commission web site: Online
*CFJ,
Chapter 11
Baldwin,
Robert E. and Christopher S. Magee, "Is Trade Policy for
Deardorff, Alan V., "An Economist's Overview
of the World Trade Organization," in Korea Economic Institute, The
Emerging WTO System and Perspectives from East Asia, Joint U.S.-Korea
Academic Studies Vol 7, 1997. Online
(Working paper version)
*Deardorff, Alan V. and Robert M. Stern, "What You
Should Know about Globalization and the World Trade Organization," Review
of International Economics 10, August 2002. Online
WTO
web site: Online
Fake
WTO web site: Online
*CFJ,
Chapter 14