ECON 3506 - International Trade III
North Terrace Campus - Semester 1 - 2014
General Course Information
Course Code ECON 3506 Course International Trade III Coordinating Unit School of Economics Term Semester 1 Level Undergraduate Location/s North Terrace Campus Units 3 Contact Up to 3 hours per week Incompatible ECON 3021 Assumed Knowledge ECON 2506 Course Description This course deals with the theory and practice of international trade and of trade-related policies. It focuses on analysing the gains from trade, the changing patterns of trade, the income distributional consequences of liberalising foreign trade, the relationship between trade, investment, and economic growth, and the reasons for and consequences of trade policies.
Course Coordinator: Dr Raul Barreto
The full timetable of all activities for this course can be accessed from Course Planner.Tuesday & Thursday, 4-5pm
Tuesday, 4-5pm, Physics, 103, Kerr Grant Lecture Theatre
Thursday, 4-5pm, Engineering Nth, N158, Chapman Lecture Theatre
Course Learning OutcomesThe purpose of this course is to provide students with a thorough grounding in the theory of international trade as well as international trade policy and to demonstrate the relevance of the theory in the analysis of (a) existing patterns of international trade and what determines them, (b) the conduct of trade policy and (c) the economic implications of international trade and trade policy both for individual economies such as Australia and the wider international community.
On successful completion of this course students will be able to:
1 Understand, at the level of formal analysis, the major models of international trade and be able to distinguish between them in terms of their assumptions and economic implications 2 Understand the principle of comparative advantage and its formal expression and interpretation within different theoretical models 3 Be able to apply partial equilibrium and (where required) general equilibrium models in analysing the economic effects of (a) trade policy instruments such as tariffs, quotas, export subsidies, (b) retaliatory measures such as anti-dumping duties and countervailing duties and (c) the creation of regional trading arrangements such as free trade areas, customs unions and common markets 4 Be familiar with, and be able to critically analyse the main arguments for protection and conversely be able to critically evaluate the relevance and realism of arguments for free trade, taking into account the costs and benefits of trade policy measures on different sections of the community and the implications for the formulation of trade policy 5 Be familiar with the major recent developments in the world trading system, and be able to critically analyse key issues raised both by the current round of WTO negotiations and by the spread of regional trading arrangements 6 Develop communications skills through the presentation of your work, interactions during tutorial sessions, and appropriate use of the discussion
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) Knowledge and understanding of the content and techniques of a chosen discipline at advanced levels that are internationally recognised. 1-6 The ability to locate, analyse, evaluate and synthesise information from a wide variety of sources in a planned and timely manner. 1-6 An ability to apply effective, creative and innovative solutions, both independently and cooperatively, to current and future problems. 1-6 Skills of a high order in interpersonal understanding, teamwork and communication. 1-6 A proficiency in the appropriate use of contemporary technologies. 1-6 A commitment to continuous learning and the capacity to maintain intellectual curiosity throughout life. 1-6 A commitment to the highest standards of professional endeavour and the ability to take a leadership role in the community. 1-6 An awareness of ethical, social and cultural issues within a global context and their importance in the exercise of professional skills and responsibilities. 1-6
International Trade: Theory and Evidence by Markusen, Melvin, Kaempfer and Maskus, Mcgraw Hill, 1995
*** This textbook is available free of charge and may be downloaded from: http://spot.colorado.edu/~markusen/textbook.html ***
The set of concepts that we study are standard. They are in no way unique to a certain brand of economics nor are they unique to this textbook. These concepts make up the essence of international trade theory. And I believe that if you understand the theory, you can better assess the world around you. We are economists. We are concerned with what choices people make and why they make those choices. We therefore study theory and then relate the theory to reality. The closer the theory is to the observed world, the better is that theory. And if the theory is really good, we can use it to actually predict behaviour. The better we can predict behaviour, the better will ultimately be the consequent policy that we write and thereby live under.
The information that you need to know is widely available. I have included some optional references below. Please keep in mind that I ultimately don’t care how you learn this material so long as you do.
Caves, R.E., J.A. Frankel and R.W. Jones, World Trade and Payments: An Introduction, New York: Harper Collins 1996 (7th edition).
Ethier,W.J., Modern International Economics, New York: W.W. Norton, 1988 (2nd edition).
Kenen, P.B, The International Economy, Englewood Cliffs: Prentice Hall, 1989 (2nd edition).
Krugman, P.R. and M. Obsfeld , International Economics: Theory and Policy, New York: Harper Collins 1994 (3rd edition).
Pomfret, R. International Trade: An Introduction to Theory and Policy, Oxford: Basil Blackwell, 1991.
Sodersten, B. and G. Reed, International Economics, London: Macmillan, 1994 (3rd edition).
Robert C. Feenstra and Alan M. Taylor, International Trade, 2007 Worth Publishers.
Online LearningMyUni - http://www.myuni.adelaide.edu.au
Other online Resources:
International Center for Trade and Sustainable
The World Bank: http://www.worldbank.org
Alan Deardorff’s Glossary of International Economics Terms:
Learning & Teaching Activities
Learning & Teaching Modes
The lectures will closely follow this text. The idea is that the lectures and the text should reinforce each other. You are strongly advised to keep up with the reading. You will find that the lectures are far easier to follow if you have already been exposed to the material via the text.
The tutorial will be primarily based on problem solving in preparation for your assessment.
The information below is provided as a guide to assist students in engaging appropriately with the course requirements.
Lectures: 2 Hours per week
Tutorials: 1 Hour per week
Home study expectation: 6 Hours per week
Learning Activities Summary
Part I Introduction Chapters Wk 1 Technical Concepts - Markusen, et.al., 1 - 4 Wk 2 Why do countries trade? 5 - 6 Part II Theoretical Analysis of International Trade Wk 3 The Classical Model: Differing Technologies 7 Wk 4 & 5 The Heckscher - Ohlin Model 8 Wk 5 & 6 The Specific Factors Model 9 Mid Semester Examination Wk 7 Government Policies as the Determinants of Trade 10 Wk 8 Imperfect Competition as the Determinant of Trade and the Gains from Trade 11 Increasing Returns to Scale 12 Wk 9 Tastes, Per Capita Income, and Technological -
Change as the Determinants of Trade
13 Empirical Studies of Comparative Advantage -
14 Part III Trade Policy Wk 10 Tariffs 15 Quotas and Other Non-tariff Barriers 16 Week 11 Imperfect Competition, Increasing Returns -
Strategic Trade Policy
17 Preferential Trade Areas 18 Week 12 The Political Economy of Trade Policy 19 Administered Protection 20
The University's policy on Assessment for Coursework Programs is based on the following four principles:
- Assessment must encourage and reinforce learning.
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Mid-semester Test 30% 29 April 2014 (in Class) Group Assignment 10% 4 April 2014 (COB) Tutorial 10% Final Exam 50%
Assessment Related Requirements
All marks received prior to the final examination are equated into your final grade only if they represent improvement over your final examination grade. For example, should you score 80/100 on the mid-term, 60/100 on your assignment, 100/100 for your tutorial and 70/100 on the final, your final grade would be credit at (0.30*80+0.10*60+0.10*100 +0.50*70=) 75/100. More will be explained about this throughout the semester. Since all marks received prior to the final examination are redeemable, you have nothing to lose and everything to gain by attending tutorials and doing your best on all of the assessments.
Should you miss either mid-semester examination for whatever reason, your final examination will be worth 30% more per missed mid-semester exam. You need not excuse yourself for your absence, as there will be no make-ups under any circumstances. This same policy applies to the assignment. Whatever you miss simply adds additional weight to the final.
NOTES ON ASSESSMENT
1. Legible hand-writing and the quality of English expression are considered to be integral parts of the assessment process. Marks cannot be awarded for handwriting that cannot be read.
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M10 (Coursework Mark Scheme) Grade Mark Description FNS Fail No Submission F 1-49 Fail P 50-64 Pass C 65-74 Credit D 75-84 Distinction HD 85-100 High Distinction CN Continuing NFE No Formal Examination RP Result Pending
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