ECON 3403-001 International Economics Policy

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ECON 3403-001 International Economics Policy
Economics 3403 - International Economics and Policy
Spring 2009 - MWF 2-2:50 - HLMS 199
Professor Robert McNown
Office: Economics 109
Telephone: 303-492-8295
Hours: Monday 3-5, Thursday 9-11
Email: [email protected]
Teaching Assistant: Kyungsoo Oh
Office: Economics 307
Telephone: 303-492-7617
Hours: TR 1-3
Email: [email protected]
This course addresses a wide range of issues in international economics, encompassing
topics in both trade and finance. The course is designed for those not majoring in economics, but
students are expected to have completed the prerequisites of Principles of Microeconomics and
Principles of Macroeconomics, or a one-semester principles course. The theory of comparative
advantage will be used to analyze trade patterns among nations, gains from trade, and the effects
of trade on income distributions. We will also consider political and economic aspects of trade
barriers, U.S. commercial policy, connections between trade and economic development, recent
trade treaties such as NAFTA and CAFTA, and the latest trade negotiations of the World Trade
Organization. Financial issues covered in the course include essentials of balance of payments
accounting, theories of balance of payments and exchange rate determination, effects of
international capital flows, domestic consequences of interdependence with world trade and
financial markets, the role of the International Monetary Fund in contemporary international
financial markets, and international financial crises.
Assignments and Evaluation
Seventy percent of your grade will be based on the three equally weighted examinations.
Preceding each examination you will be given a problem set. These problem sets will be graded
and each will count five percent towards your final grade. The questions on the problem sets will
also provide practice for related questions on the exam, and these problems and other questions
will be covered in review sessions scheduled prior to each exam. Another ten percent of your
grade is based on an analytical essay, and class participation through clickers counts for the
remaining five percent.
You should purchase an i-clicker from the bookstore if you do not already have one.
Then you need to register your clicker for this course, following the instructions at
Bring your clicker to class every day, and before class begins set your frequency according to the
posted code for our room. We will usually begin each class with a clicker question covering the
reading, a current event in international economics, or the previous class. Discuss this question
with your neighbors and submit your answer within the first few minutes of class.
My goals in using clickers are to promote active learning and to encourage you to reason
through the analytical material in the course. For each clickers question one point is awarded for
submitting an answer, and one additional point is given for the correct answer. In case there is
not a single correct answer (maybe I just want your opinions on some current policy), every
submitted answer counts two points.
For the essay assignment I will post an article on CULearn together with suggested points
for discussion. Four articles will be posted throughout the semester and each student will write
an essay on one of the four articles. In order to spread the workload throughout the term, you are
required to submit your essay according to the schedule below. If anyone has a legitimate reason
for changing their assigned article and due date, this can be arranged by contacting me within
one day after the essay assignment is posted. Essays will be due one week after the article is
Last name
Essay due
general topic
International Trade Policy
International Trade Policy
Issues in International Finance
Issues in International Finance
Examinations and make-up policy.
During our final exam period there will be both a mandatory final exam and an optional final.
The mandatory section will be comparable to the two previous midterm exams, covering the
final third of the course, and designed to be completed within an hour and fifteen minutes. The
optional part of the final is available to students wishing to make up a midterm exam, either
because of an unsatisfactory performance on a midterm or because a midterm was missed for
any reason. The optional final serves as the only opportunity for a make-up exam. The content
of this optional final may cover any of the topics on the first two exams, but it will be designed
to be completed within an hour and fifteen minutes. The score on the optional final will replace
the lowest midterm exam score, but only if this results in an improvement of the overall grade.
Schedule and assignments
Text: Husted, Steven, and Michael Melvin, International Economics, seventh edition (2007).
Earlier editions are acceptable, but it is your responsibility to coordinate the pages in your edition
with the assigned readings below.
In addition to the reading assignments in the text, I will post on our CULearn site current
readings related to the topics of the week. These will be discussed in class as time permits, and
all readings will be fair game for the examinations. Each week before Monday’s class, log on to
CULearn and check the week’s assignment and readings under the “Readings and Class Notes”
module. You may also want to print out any notes posted there for that week’s classes, especially
graphs that we will work through in class.
1/12 1/16
Overview of international economics; recent
trends towards globalization; fundamental tools
of analysis
Comparative advantage, classical trade theory,
the Heckscher-Ohlin (HO) model, gains from
trade; effects of trade on income distribution
HO model continued, gains from trade. and
effects of trade on income distribution
Tests and extensions of basic HO trade model
Readings in text
chapters 1,2 (pages 145)
Economic analysis of tariffs; welfare loss from
Nontariff barriers; quotas and voluntary export
Political and economic aspects of trade policy;
US commercial policy; the GATT and WTO
Customs unions and free trade agreements;
NAFTA, CAFTA, and the EU
Chapter 6
3/9 –
3/16 –
Trade policy and economic growth, import
substitution and export promotion strategies;
Exchange rate basics; balance of payments
accounting; central bank intervention
Chapter 10
3/23 3/27
3/30 –
Spring Break
1/19 –
1/26 –
2/2 –
2/9 –
2/16 –
2/23 –
3/2 –
4/6 –
4/13 –
4/20 –
4/27 –
chapters 3-4 (appendices 1/19 MLK
chapter 4
Chapter 5
Chapter 7
2/6 prob.
set 1 due
2/11 exam
essay 1
Chapter 8
Chapter 9
3/2 essay
2 due;
3/6 prob.
set 2 due
3/13 exam
chapters 11, 12; chapter
13 (pages 331-9 and
343-344 only)
Purchasing power parity (price levels and
chapter 14; chapter 15
exchange rates); Interest parity (interest rates
(Pages 369-373).
and exchange rates)
Theories of the balance of payments and
chapter 17 (pages 409exchange rates, elasticities approach and the J- 422 only)
curve, absorption approach:
Alternative institutions of international finance; Chapter 19
gold standard; fixed and flexible exchange
rates; Bretton Woods; current monetary system
Currency crises; third world debt problems:
chapter 16; chapter 20
(pages 498-509)
Current world financial crisis: causes and
Final exam 1:30 – 4:00 HLMS 199
4/13 essay
3 due
4/22 Prob.
set 3 due
4/27 essay
4 due
Administrative Issues
If you qualify for accommodations because of a disability, please submit to me a letter from
Disability Services (DS) early in the semester so that your needs may be addressed. DS determines
accommodations based on documented disabilities (303-492-8671, Willard 322,
I shall make every effort to accommodate all students who, because of religious obligations, have
conflicts with scheduled exams, assignments, or other required attendance, provided I am notified well in
advance of the scheduled conflict. Please notify me at least two weeks in advance of the conflict to
request special accommodation. The campus policy concerning religious observances can be viewed at
Students and faculty each have responsibility for maintaining an appropriate
learning environment. Students who fail to adhere to such behavioral standards
may be subject to discipline. Faculty have the professional responsibility to treat all students with
understanding, dignity and respect, to guide classroom discussion and to set reasonable limits on the
manner in which they and their students express opinions. Professional courtesy and sensitivity are
especially important with respect to individuals and topics dealing with differences of race, culture,
religion, politics, sexual orientation, gender variance, and nationalities. See polices at
http://www.colorado.edu/policies/classbehavior.html and at
All students of the University of Colorado at Boulder are responsible for
knowing and adhering to the academic integrity policy of this institution.
Violations of this policy may include: cheating, plagiarism, aid of academic
dishonesty, fabrication, lying, bribery, and threatening behavior. All
incidents of academic misconduct shall be reported to the Honor Code Council
([email protected]; 303-725-2273). Students who are found to be in violation
of the academic integrity policy will be subject to both academic sanctions
from the faculty member and non-academic sanctions (including but not limited
to university probation, suspension, or expulsion). If you have any specific questions about what
constitutes plagiarism with respect to the assignments in this course, please raise them with me.
Other information on the Honor Code can be found at
http://www.colorado.edu/policies/honor.html and at
The University of Colorado Policy on Sexual Harassment applies to all students,
staff and faculty. Sexual harassment is unwelcome sexual attention. It can
involve intimidation, threats, coercion, or promises or create an environment
that is hostile or offensive. Harassment may occur between members of the same
or opposite gender and between any combination of members in the campus
community: students, faculty, staff, and administrators. Harassment can occur
anywhere on campus, including the classroom, the workplace, or a residence
hall. Any student, staff or faculty member who believes s/he has been sexually
harassed should contact the Office of Sexual Harassment (OSH) at 303-492-2127
or the Office of Judicial Affairs at 303-492-5550. Information about the OSH
and the campus resources available to assist individuals who believe they have
been sexually harassed can be obtained at:
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