South 115B2, Office Hours: F, 10:30-11:20, and by appointment on Tuesdays and Thursdays.
(Please note that while I have limited scheduled office hours this semester, I can usually be available around 12:30 on MWF or other times on TR.)
Office: 245-5428 Home: 245-9383 Email: stone@geneseo.edu

Catalog Description:
A study of the theories of trade and open-economy economics, with attention to international economic policy, protectionism and its consequences, and economic growth and development.

Intended Learning Outcomes:
This course is designed to introduce students to the theory of international economics, and to apply that theory to current international activities in the areas of international trade policy. Throughout this course, the focus is on two simultaneous themes: economic theory and its application to international problems; and the interaction between economic theories and the political arena. This course will examine the theoretical foundations of modern trading relations between countries and will also discuss the interaction of differing systems of economic valuation. The course concludes with an examination of the impact of trade policy on income distribution, economic growth, and resource movements.
* Understand the theory of comparative advantage and its implications for the gains from trade.
* Understand and represent graphically and mathematically the Ricardian and Heckscher-Ohlin trade models.
* Relate the trade models to real-world examples, and explain the variations on the trade models.
* Define and understand the implications of the existence of intra-industry trade.
* Understand the rationales for protectionism and the effects of protectionism on the gains from trade and critically evaluate these arguments.
* Explain the difference types of trade protection, including the effects of customs unions, and their effects.
* Understand how international trade impacts economic growth and development.
* Analyze the effects of multinational corporations and resource mobility on nations and individuals.

How This Course Relates to the School of Business Educational Objectives and Course Sequence:
* This course emphasizes critical thinking and the application of both logical and quantitative skills. To succeed in this course, you must communicate clearly and effectively in writing, and you must learn to relate graphing techniques to written arguments.
* This courses stresses the application of economic theory to real-world economic problems in international economics that are relevant to both economics, international relations, and business administration students, as well as others.
* This course is an elective course in the economics sequence. It builds on skills learned in Econ 101 and 102, which are enforced prerequisites to this course.

Textbook:
Dominick Salvatore, International Economics, 9th edition (Wiley). If you have the 8th edition, that’s ok, too. Subscription to The Economist is REQUIRED, and you must, without exception, sign up on the class sheet so that I can verify your subscription. You are responsible for keeping up with the book problems as we go along.

Grading:
Your grade will be based on three exams (weighted 15/15/30%), the term project (20%), and class participation (20%). There will also be a final (take-home) question, which is due during the final period and counts as part of the third exam..

Make-ups on exams will be given only in the case of documented emergencies.

Class Participation and WHAT IT MEANS:
You are, in addition to the assignments and end-of-semester presentation, responsible for keeping up with current events that are relevant to international economics in general and specifically to the commodity that you have chosen (and things that may have an impact on it). Every Friday we will have a current events discussion, and you are expected to be prepared for this. Participation is 20% of your grade. If you do not participate, the grade you will receive is 0%… which means that if you get 100% on everything else, the maximum grade you can receive is a B-. (Participation also includes general class discussion and attendance/discussion at the presentations of others. You must attend all presentations unless specifically excused; failure to do so will lower your participation score by a full letter grade.)

The Term Project:

The term project involves study of the trade patterns, protectionism, and economic issues related to a specific commodity or product.* By the end of the second week of class, you must choose a product (Products are selected on a first-come, first-served basis with approval of the professor.). This could be a primary commodity, such as coffee, oil, beef, or cacao, or it could be a manufactured good, such as clothing, computers, or automobiles. However, it must be something in which there is significant international trade.

You are, in addition to the assignments and end-of-semester presentation, responsible for keeping up with current events that are relevant to international trade in general and specifically to the product that you have chosen (and its major traders). Every Friday we will have a current events discussion, and you are expected to be prepared for this. Participation is 15% of your grade. If you do not participate, the grade you will receive is 0%… which means that if you get 100% on everything else, the maximum grade you can receive is a B. (Participation also includes general class discussion and attendance/discussion at the presentations of others.)

The first part of your project is a summary of issues relating to your topic product. This should be a brief (not more than 3 pages) explanation of issues relating to your product, including the following:
Significance of the product/commodity
Major exporters
Major importers
Market structure issues relating to the product
Trade/protectionism issues relating to the product
Economic development issues relating to the product.
Essentially, this is an annotated outline of what your completed project will look like at the end of the semester. You will then fully research the topic and will present these findings in a term paper and presentation at the end of the semester. Presentations will be in the last two weeks of class. Papers are due the last day of class, although earlier submission is encouraged.

*Other types of term paper topics may be considered; if you have an idea for a clearly-related alternative topic, please discuss it with me.

Course Schedule:
(Chapters listed are tentative; exam dates are firm.)

Week 1: January 17-19
Chapters 1, 2: Comparative Advantage

Week 2: January 22-26
Chapter 3: The Standard Theory of International Trade
Topics due Friday, January 26.

Week 3: January 29-February 2
Chapter 4: Demand and Supply, Offer Curves, and the Terms of Trade

Week 4: February 5-9
Chapter 5: Factor Endowments and the Heckscher-Ohlin Theory
Exam 1, Friday, February 9

Week 5: February 12-17
Chapter 6: Economies of Scale, Imperfect Competition, and International Trade
Topic summary due Monday, February 12

Week 6: February 19-23
Chapter 7: Economic Growth and International Trade

Week 7: February 26-March 2
Chapter 8: Trade Restrictions: Tariffs
Exam 2: Friday, March 2

Week 8: March 5-9
Chapter 9: Nontariff Trade Barriers and the New Protectionism

Week 9: March 12-16 SPRING BREAK

Week 10: March 19-23
Chapter 10: Economic Integration: Customs Unions and Free Trade Areas

Week 11: March 26-30
Chapter 11: International Trade and Economic Development

Week 12: April 2-6
Chapter 12: International Resource Movements and Multinational Corporations

Week 13: April 9-13
Presentations
Exam 3: to be announced

Week 14: April 16-20
Presentations

Week 15: April 23-27

Last Day of Class: April 30
Term Paper due, Monday, April 30, beginning of class.

FINAL: Monday, May 7, 12-3 a.m.
Presentations, and FINAL QUESTION due.

(No early finals will be given under ANY circumstances.)
(Requests to take the final at some other time must be submitted in writing no later than February 19. No later requests will be considered for reasons other than death or similar emergency. No early finals will be given for ANY reason.) Please check your schedule for any conflicts NOW!