ECON 4008 - International Trade IV (H)

North Terrace Campus - Semester 2 - 2017

This course seeks to provide the tools necessary to obtain a clear understanding of what determines the way international trade patterns evolve through time as economies grow. That requires drawing on and strengthening our knowledge of (a) trade theories, (b) the economics and political economy of foreign trade and investment policies, and (c) quantitative modelling of global trade flows.

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Course Details

Course Code	ECON 4008
Course	International Trade IV (H)
Coordinating Unit	Economics
Term	Semester 2
Level	Undergraduate
Location/s	North Terrace Campus
Units	3
Contact	Up to 4 hours per week
Available for Study Abroad and Exchange	N
Prerequisites	ECON 2506 and ECON 2507 OR ECON 3506
Restrictions	Available only to students enrolled in the Bachelor of Economics (Honours) program
Assessment	Typically, mid-semester test, final exam

Course Staff

Course Coordinator: Dr Benedikt Heid

Dr Benedikt Heid
Location: Room 4.08, 10 Pulteney Street
Telephone: 831 34930
Office hours for students: 11-12am Fridays
email: benedikt.heid@adelaide.edu.au

Course Timetable

The full timetable of all activities for this course can be accessed from Course Planner.

Course Learning Outcomes

Research in international trade focusses on the determinants and consequences of globalization: Do consumers and workers benefit from trade liberalization? Why do countries sign trade agreements and how do they affect trade flows? How do firms react to increasing competition? What is the optimal level of tariffs? Which firms lose from globalization, and which ones profit from it? Why do multinational enterprises exist?

This course seeks to improve our understanding of the economic effects of globalization and give answer to these questions.

The course will focus both on current theoretical and empirical research in international trade with a clear general equilibrium (economy wide) focus. This approach is also helpful in other fields of economics including public finance, environmental and resource economics, agricultural or other industry/sector economics, and the economics of politics.

After completing this course, students will be able to analyze current issues in international trade with analytical rigor. This is essential for both trade policy consulting for governments and the private sector as well as for understanding current research papers in international trade as a preparation for a PhD.

The course assumes students have the basic toolkit of microeconomics and trade theory from undergraduate courses, which will be built on and applied to analyse contemporary trade and trade-related policy issues.

On successful completion of this course, students will be able to:

1	Describe the most important theories used in the academic literature to explain observed trade patterns using formal mathematical analysis.
2	Sketch the interaction between different stylized facts of international trade patterns and the development of theories which try to explain these stylized facts.
3	Apply trade theories to describe the effects of trade liberalization policies and to critically evaluate current trade policy discussions.
4	Identify and reflect upon the individual contributions of important research papers in international trade and constructively criticize their shortcomings.
5	Have improved their communication skills through presenting their work and by interacting during tutorial sessions and discussions in class.
6	Describe the most commonly used econometric techniques in current international trade research.

University Graduate Attributes

This course will provide students with an opportunity to develop the Graduate Attribute(s) specified below:

University Graduate Attribute	Course Learning Outcome(s)
Deep discipline knowledge informed and infused by cutting edge research, scaffolded throughout their program of studies acquired from personal interaction with research active educators, from year 1 accredited or validated against national or international standards (for relevant programs)	1-6
Critical thinking and problem solving steeped in research methods and rigor based on empirical evidence and the scientific approach to knowledge development demonstrated through appropriate and relevant assessment	1-6
Teamwork and communication skills developed from, with, and via the SGDE honed through assessment and practice throughout the program of studies encouraged and valued in all aspects of learning	1-6
Career and leadership readiness technology savvy professional and, where relevant, fully accredited forward thinking and well informed tested and validated by work based experiences	1-4, 6
Intercultural and ethical competency adept at operating in other cultures comfortable with different nationalities and social contexts able to determine and contribute to desirable social outcomes demonstrated by study abroad or with an understanding of indigenous knowledges	1-3, 5
Self-awareness and emotional intelligence a capacity for self-reflection and a willingness to engage in self-appraisal open to objective and constructive feedback from supervisors and peers able to negotiate difficult social situations, defuse conflict and engage positively in purposeful debate	2, 4-6

Learning Resources

Required Resources

The course will be mostly based on the following text book:

Robert C. Feenstra (2016): Advanced International Trade. Theory and Evidence. Second Edition. Princeton University Press.

In addition, papers published in academic journals related to the material covered in class will be linked to on myuni.

Recommended Resources

Alternative graduate-level textbooks are:

Dixit, A.K. and Norman, V. (1980): Theory of International Trade. Cambridge Economic Handbooks.
Krugman, Paul R. and Helpman, Elhanan (1985): Market Structure and Foreign Trade Increasing Returns, Imperfect Competition, and the International Economy. MIT Press.
Note that these textbooks do not cover the more recent developments which we will discuss in class but are perfectly fine for the old classics.

To recapitulate the most important concepts in international trade at an undergraduate level, students are advised to consult any of the following books:

Feenstra, Robert C. and Taylor, Alan M. (2014): International Economics. Third Edition. Worth Macmillan.
Krugman, Paul R., Obstfeld, Maurice and Melitz, Marc J. (2015): International Economics. Theory and Policy. Tenth Edition. Pearson.
McLaren, John (2013): International Trade. Wiley.

A good intermediate trade textbook (more formal than the above but less formal than Feenstra (2016) is:

Marrewijk, Charles van (2012): International Economics. Theory, Application, and Policy. Second Edition. Oxford University Press.

Finally, a very nice short and non-mathematical summary of international trade for a general interest audience is:

Helpman, Elhanan (2011): Understanding Global Trade. Belknap Harvard.

If you want to refresh your microeconomics knowledge, I recommend these books:
Varian, Hal R. (2006): Intermediate Microeconomics. Seventh Edition. Norton.
Varian, Hal R. (1992): Microeconomic Analysis. Third Edition. Norton.

If you want to refresh your math knowledge, I recommend this book:
Sydsaeter, Knut, Hammond, Peter, Strom, Arne and Carvajal, Andrés (2016): Essential Mathematics for Economic Analysis. Fifth Edition. Pearson.

Online Learning

The slides used in each lecture will be uploaded on MyUni after each lecture. Additional links to papers will also be put on MyUni

Learning & Teaching Modes

Student participation in lectures is actively encouraged in the form of questions, comments and discussion.

Workload

The information below is provided as a guide to assist students in engaging appropriately with the course requirements.

In addition to the two 2-hour classes each week, students are expected to spend an additional 8 hours each week studying the required readings in advance of and then again following each lecture.

Learning Activities Summary

Teaching & Learning Activities	Related Learning Outcomes
Lectures	1-4, 6
Tutorials	1-6

tentative time table

week	topic	chapter
1	Trade due to technological differences: Ricardo model	1
2	Trade due to endowment differences: Heckscher-Ohlin-Samuelson model	2
3	Trade between similar countries: Krugman model and monopolistic competition	5
4-5	Estimating trade costs and the effects of trade agreements: the gravity equation	5
6	Technology differences revisited: Eaton-Kortum model, a Ricardian model for the 21st century	6
7	Trade policy I: Import tariffs	8
8	Trade policy II: import quotas as an example of non-tariff barriers	9
9	Heterogeneous firms and within-industry adjustments of trade liberalization	6
10-11	Trade in intermediate inputs and trade in tasks: offshoring	4
12	Multinationals and organization of the firm: exports vs. FDI	12

Note: This table is subject to change at the discretion of the lecturer, depending on the general progress during class as well as student feedback.

Small Group Discovery Experience

Given the small number in this course, every class period will involve student participation in discussion.

The University's policy on Assessment for Coursework Programs is based on the following four principles:

Assessment must encourage and reinforce learning.
Assessment must enable robust and fair judgements about student performance.
Assessment practices must be fair and equitable to students and give them the opportunity to demonstrate what they have learned.
Assessment must maintain academic standards.

Assessment Summary

Assessment Task	Due	Weighting	Learning Outcome
Mid-term Exam	Week 6	30%	1-4, 6
Assignments	continuous	20%	1-6
Final Exam	Week TBA	50%	1-4, 6
Total		100%

Assessment Detail

Assessment marks prior to the final exam may be displayed on the course website through MyUni. Students are encouraged to check their marks and notify the lecturer-in-charge of any discrepancies.

It is each student's responsibility to read the examination timetable.

Submission

There will be no assignments to submit in this course.

Course Grading

Grades for your performance in this course will be awarded in accordance with the following scheme:

M11 (Honours Mark Scheme)
Grade	Grade reflects following criteria for allocation of grade	Reported on Official Transcript
Fail	A mark between 1-49	F
Third Class	A mark between 50-59	3
Second Class Div B	A mark between 60-69	2B
Second Class Div A	A mark between 70-79	2A
First Class	A mark between 80-100	1
Result Pending	An interim result	RP
Continuing	Continuing	CN

Further details of the grades/results can be obtained from Examinations.

Grade Descriptors are available which provide a general guide to the standard of work that is expected at each grade level. More information at Assessment for Coursework Programs.

Final results for this course will be made available through Access Adelaide.

Additional Assessment

If a student receives 45-49 for their final mark for the course they will automatically be granted an additional assessment. This will most likely be in the form of a new exam (Additional Assessment) and will have the same weight as the original exam unless an alternative requirement (for example a hurdle requirement) is stated in this semester’s Course Outline. If, after replacing the original exam mark with the new exam mark, it is calculated that the student has passed the course, they will receive 50 Pass as their final result for the course (no higher) but if the calculation totals less than 50, their grade will be Fail and the higher of the original mark or the mark following the Additional Assessment will be recorded as the final result.

Student Feedback

The University places a high priority on approaches to learning and teaching that enhance the student experience. Feedback is sought from students in a variety of ways including on-going engagement with staff, the use of online discussion boards and the use of Student Experience of Learning and Teaching (SELT) surveys as well as GOS surveys and Program reviews.

SELTs are an important source of information to inform individual teaching practice, decisions about teaching duties, and course and program curriculum design. They enable the University to assess how effectively its learning environments and teaching practices facilitate student engagement and learning outcomes. Under the current SELT Policy (http://www.adelaide.edu.au/policies/101/) course SELTs are mandated and must be conducted at the conclusion of each term/semester/trimester for every course offering. Feedback on issues raised through course SELT surveys is made available to enrolled students through various resources (e.g. MyUni). In addition aggregated course SELT data is available.
Student Support
Policies & Guidelines
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Authorised by:	Deputy Vice-Chancellor and Vice-President (Academic)
Maintained by:	Course Outlines Administrator