Dr Benedikt Heid

Location: Room 4.08, 10 Pulteney Street
Telephone: 831 34930
Office hours for students: 1-2pm Fridays

email: benedikt.heid@adelaide.edu.au

The aim of this course is to enable students to define core concepts in international economics and to apply these concepts to a range of policy related questions. The course pays particular attention to explaining the basic reasons why countries engage in international trade and investment and how trade affects consumers, workers and firms. It provides students an overview of current trade and investment patterns and the world trade system. A key objective of this course is to provide students with the necessary tools so that they can analyze currently discussed issues in international economics and formulate and evaluate potential policies for the instutions and/or governments they may work for in the future.

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

1	Explain the concept of comparative advantage.
2	Describe the essentials of trade theories.
3	Identify potential winners and losers from trade.
4	Describe the effects of multinational activity of firms and foreign direct investment.
5	Explain effects of migration.
6	Assess the economic impacts of trade, investment, and migration policies.

Robert C. Feenstra, Alan M. Taylor (2015), International Economics (New York: Worth)

3rd Edition. ISBN-13:978-1-4292-7842-3

Note: The text book consists of two parts: international economics & international macroeconomics. This course will only deal with the international trade part. Therefore, students can also work with Robert C. Feenstra, Alan M. Tayloer (2015), International Trade (Macmillan), 3rd Edition. ISBN-13: 978-1-4292-7844-7, which only contains the international trade part of the book International Economics.

Further Reading
You are expected to read the textbook as well as the articles assigned in lectures or tutorials. In addition, a series of lecture slides will be made available. The final exam will cover all lecture materials and assigned readings.

Some topics refer to chapters in a secondary text book which complements the book by Feenstra and Taylor (FT).

Krugman, P., M. Obtsfeld and M. Melitz: International Economics: Theory and Policy, 10th edition, Pearson 2014 (KOM).

Another valuable text book with a different style compared to the FT and KOM text books which adds an additional perspective to the topics covered is:

McLaren, John: International Trade, Wiley 2013.

Lecture power-points and Tutorial questions will be made available through the course website www.myuni.adelaide.edu.au

The format of the teaching consists of formal lectures and tutorial/workshop sessions held intensively. The lectures introduce new concepts, encourage textbook revision, and provide anchor points for further academic development. In tutorials, discussions relating to the various trade theories and policies will be initiated and students will be expected to fully participate, so it is imperative you come to class well prepared.

Lecture sessions
The lectures consist of a combination of power point slides and graphical analyses on the white board, allowing for presentation of the economic theory in analytical, numerical, and graphical contexts.

Tutorials
Tutorials represent an important learning component of the class. They are aimed to foster problem solving and discussion skills, and they are designed based on the combination of lectures material and textbook.

The tutorials will deal with solving sets of trade-related problems from the assignments. Students are expected to work through the assignments independently (or in groups) and prepare individual solutions to be handed in and discussed during the tutorial time (or as announced on MyUni and during the lecture).

Students in this course are expected to attend all lectures throughout the semester plus tutorial classes. In addition, students should allocate 4-5 hours per week to undertake reading and individual study. The lecturer is available for one-on-one consultations at times to be arranged by mutual agreement. Consultations will be held in the lecturer’s designated room.

Schedule

Week	Topic	Chapters in Feenstra and Taylor (FT); Krugman, Obstfeld, Melitz (KOM)
1	Globalization – an overview	1 (FT)
2	Why do countries trade? Ricardo’s simple idea: comparative advantage	2 (FT)
3	Who wins and who loses from international trade? The specific factors model as a primer on the political economy of trade policy – why lobbies exist	3 (FT)
4	Trade with developing countries: the Heckscher-Ohlin model	4 (FT)
5	Trade with industrialized countries: increasing returns to scale and monopolistic competition	6 (FT)
6	Winners and losers again: Which firms benefit from international trade?	8 (KOM)
7	Multinational enterprises and offshoring to developing countries	7 (FT)
8	Trade policy: tariffs, trade wars, trade agreements and the WTO	8, 9 (FT)
9	Trade policy in developing countries: the infant industry argument	8,9 (FT); 11 (KOM)
10	Migration policy – Should Donald Trump build a wall?	5 (FT)
11	Foreign Direct Investment (FDI) – Should Australia ban Chinese investment?	5 (FT)
12	Is trade good or bad for the environment? Australian coal exports and global CO2 emissions	11 (FT)

Note: This list of topics covered is tentative and may change.

None

Assessment Task	Task Type	Due	Weighting	Learning Outcome
Mid-term test	Formative & Summative	Before week 6	30%	1-6
Assignments	Formative & Summative	Every 2 weeks	20%	1-6
Final Exam	Summative	Final exam period	50%	1-6
Total			100%

 

Mid-term Test 30%

A 1 hour mid-term test will be held in class some time around Week 4 to 6. It will cover the materials covered so far in the lecture and tutorials. The exact date and material covered will be announced during the lecture.

There will not be a make-up mid-semster exam. Those who miss the mid-semester exam must obtain documentation in line with university regulations in order to avoid a grade of zero on the mid semester exam. FOr those who miss the mid-semester exam and obtain accepted documentation the relevant weight will be added to the weight of the final exam in determining the overall grade for the course.


Assignments 20%

There will be 6 assignments over the semester. From every assignment, one exercise will be randomly chosen and graded. The grade for the selected exercise will be 0, 2 or 4, depending on the quality of the answer provided. Particular attention will be given to the work out of the exercise's solutions.

The grading rule to be used is: 0: no attempt to do the assignment, 2: a majority of incorrect or undocumented answers, but some effort shown. 4: a majority of correct and documented answers, considerable effort shown.


Final Exam 50%

There will be a 2 hour exam at the end of the course at a time to be advised. The exam will cover the entire course. This includes all materials from the lectures, assignment textbook, and other readings, as well as discussions and exercises considered in the tutorials. The final exam is worth 50% of the course’s assessment.


General remarks

Legible hand-writing and the quality of English expression are considered to be integral parts of the assessment process. Please note that marks will be deducted in the final examination for poor English expression.

Dictionaries (e.g., Chinese to English) will be allowed in examinations but not electronic ones. Economics dictionaries will not be allowed.


Grade calculation

Final student grades will be determined in the following way:

The final grade will be a weighted average of the grade obtained in the mid-term test (weight 30%), the final exam (weight 50%) and the grade obtained in the assignments (20%).

The grade in the assignments is calculated in the following way: Every assignment obtains 0, 2 or 4 points. The points of the best 5 of the 6 assignments are summed up. Hence, the maximum number of points from the assignments will be 20 equalling a mark of 100 for the calculation of the weighted average. Lower obtained points are scaled accordingly.

Submission of the assignments is required as per instructions on MyUni.

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.