Week 14

November 26, 2018    Chapter 15: Exchange Rates in the Long-Run

• Chapter 15: Exchange Rates in the Long-Run
  • PPP - Absolute versus Relative
  • Law of One Price
  • Tests of PPP
  • Big Mac PPP
  • Monetary Approach to Exchange Rates
• Chapter 15 PowerPoint Slides







November 28, 2018    Chapter 16: Theories of the Current Account

• Chapter 16: Theories of the Current Account
  • Elasticities Approach
  • The J curve
  • Pass Through Analysis
  • The Absorbtion Approach
  • The Intertemporal Model
• Chapter 16 PowerPoint Slides





Week 13




November 19, 2018    Exam III: Chapters 11, 12, 13, and 14






November 21, 2018    Have a Happy Thanksgiving!



• Review Day




Week 12

November 12, 2018    Veterans Day Holiday






November 14, 2018    Chapter 14: Exchange Rates in the Short-Run

• Chapter 14: Exchange Rates in the Short-Run
  • Exchange Rate Behavior
  • Uncovered Interest Rate Parity
  • Rules for Profitable Speculation
  • Expected Exchange Rates and the Term STructure of Interest Rates
  • Tests of Uncovered Interest Rate Parity
• Chapter 14 PowerPoint Slides







Week 11

November 5, 2018     Chapter 12: Foreign Exchange Market



• Chapter 12: Foreign Exchange Market
  • Exchange Rate
    • Spot Rates - spread
    • Forward Rates
    • Arbitrage
    • Covered Interest Parity
  • The Futures Market and Foreign Currency Options
  • The Foreign Exchange Market and the Balance of Payments
    • Appreciation, Depreciation, and Intervention
  • Chapter 12 PowerPoint Slides





November 7, 2018    Chapter 13: International Monetary Systems

• Chapter 13: International Monetary Systems
  • The Gold Standard (1880-1914) - price specie flow mechanism
  • The Interwar Period (1918-1939)- Gold exchange standard
  • Bretton Woods System (1944-1973) - Devaluation, Revaluation
  • Today's Monetary System (1973-Present)
• Chapter 13 PowerPoint Slides




Week 10

October 29, 2018    Chapter 11: The Balance of Payments and Review the Exam



Review Exam 2 - Quiz

• Come to class with materials you need to answer the questions on the exam (Textbook, PPT, Notes, etc.)


• Chapter 11: The Balance of Payments
• The Accounts
  • International Reserves
  • Current Account Balance and the Balance of Trade
  • Official Settlements Balance
  • Blance of Payments Equilibrium and adjustment
• Chapter 11 PowerPoint Slides




October 31, 2018    NO CLASS - MVEA Conference







Week 9

October 22, 2018     Review and Special Topics



• Review the material in Chapters 6 - 9
• Preferencial Trade Arrangements: Economic Analysis
  • NAFTA to USMCA
  • Other US Free-Trade Area Agreements
  • The EU
  • Regionalism versus Multilateralism
• Quizzes and a few other things for Exam #2





October 24, 2018    Exam II: Chapters 6 - 9





Week 8

October 15, 2018     Chapter 8 - Commercial Policy: History and Practice



• Read Chapter 8 - Commercial Policy: History and Practice Chapter 8 PPT
• Another PPT - Commercial Policy #3
  • The History of U.S. Commercial Policy
  • Uruguay Round and the Creation of the WTO
    • Doha Round
    • NOW?
    • The Conduct of U.S. Commercial Policy



October 17, 2018    Chapter 9 - Preferential Trade Arrangements



• Chapter 9 - Preferential Trade Arrangements Chapter 9 PPT and Another PPT - Regional Trade Arrangements
  • Preferencial Trade Arrangements: Economic Analysis
    • NAFTA to USMCA
    • Other US Free-Trade Area Agreements
    • The EU
    • Regionalism versus Multilateralism
    
    
    

    Week 7

October 8, 2018     Chapter 7 - Nontariff Barriers and Arguments for Protection



• Read Chapter 6 - Tariffs Another PPT - Commercial Policy #1
  • A guide for tomorrow's lecture - some definitions and things
  • World price revisited
    • Who Gains and Who loses within a country
    • Graph on page 126
    • An Export Tariff
    • The Optimal Tariff
    • Tariff Escalation
  • 3 panel diagrams (jpg)
  • 3 panel diagrams (pdf)
  
  
• Read Chapter 7 - Nontariff Barriers Chapter 7 PPT
  • Quotas - What's an Embargo?
  • What's a TRQ?
    • Producer and Consumer Surplus - Gains and losses (the welfare effects of Quotas)
    • What are quota rents?
    • Equivalence or nonequivalence of tariffs and quotas



October 10, 2018    Chapter 7 - Nontariff Barriers and Arguments for Protection continued



• Chapter 7 - Arguments for Protection Another PPT - Commercial Policy #2
  • Other nontariff barriers
    • Customs valuation practices and government procurement policies
    • Technical Barriers to Trade
    • Health and Safety Standards
    • Failure to Protect Intellectual Property Rights
    • Export Subsidies
  • Arguements for Protection
    • Invalid Arguments: Patriotism, Employment, Fallacy of Composition, Presevation of the Home Market
    • Valid Arguments: Government Revenue, Income redistribution, Noneconomic goals, Infant Industry Protection, Domestic Distortions, Protecting the Environment
  • Strategic Trade Policies





Week 6

October 1, 2018     Chapter 6 - Tariffs



• Read Chapter 6 - Tariffs Chapter 6 PPT
  • Gains from Free Trade
  • An Introduction to Tariffs
    • Producer and Consumer Surplus
    • Gains from Trade one more time, World Price
    • Welfare cost of Tariffs - Dead Weight Loss (DWL)



October 3, 2018    Chapter 6 - Tariffs continued



• Read Chapter 6 - Tariffs Another PPT - Commercial Policy #1
  • A guide for tomorrow's lecture - some definitions and things
  • World price revisited
    • Who Gains and Who loses within a country
    • Graph on page 126
    • An Export Tariff
    • The Optimal Tariff
    • Tariff Escalation






Week 5

September 24, 2018     Review of Materials Covered so far



• Review of the Models of Trade




September 26, 2018    Exam I: Chapters 1 - 4

Week 4

September 17, 2018     Finish Ch. 2 & 3 and start Chapter 4: Resources, Comparative Advantage, and Income Distribution



• Finish Chapter 3
• Husted & Melvin's Chapter 4 PowerPoint Slides
• A Model of a Two-Factor Economy
  • Prices and Production
  • Choosing the Mix of Inputs
  • Factor Prices and Goods Prices
  • Resources and Output
• The HO Theorem

September 19, 2018    Chapter 4: HO Model Continued



• Another set of slides
• Effects of International Trade Between Two-Factor Economies
  • Relative Prices and the Pattern of Trade
  • Trade and the Distribution of Income
  • Factor Price Equalization
  • Trade and Income Distribution in the Short Run
  • Case Study: North-South Trade and Income Inequality

Week 3

September 10, 2018    Finish Chapter 2: and Chapter 3: The Classical Model of International Trade



• Introduction to Chapter 2: The Basic Model
  • General Equilibrium Model: Things are determined at the same time (simultaneously)... Assumptions:
    • 7. Community Indifference Curves (consumers preferences in each country)
• Basic Model: Solutions
  • Autarky = Pre-Trade
  • Measuring National Welfare
  • National Supply and Demand
• A step-by-step discussion of Chapter 2




September 12, 2018     Chapter 3: The Ricardian Model



• Read Chapter 3 - The PowerPoint are here: Chapter 3 PPT
• Merchantilism: Using Government to increase Exports and decrease Imports
• Step-by-step PowerPoint walk through of Chapter 3
• Adam Smith's Basis for trade
  • Specialization and the Division of Labor
  • Merchantilism lowered a country's standard of living and wealth
• Assumptions 8, 9, and 10: Immobile inputs, no trade barriers, and balanced trade.
• Add in the Labor theory of Value and Constant Returns to Scale (only for the Classical Model)
• So in Autarky the price of the good equals the value of the labor used to produce it
• Absolute Advantage: A country can produce more of a good than the other.
• Ricardo's Model
• What if a country has the absolute advantage in BOTH goods (U.S.A.)
• Comparative Advantage

Week 2

September 3, 2018     HAPPY LABOR DAY HOLIDAY!!!

September 5, 218     Chapter 2: Tools of Analysis for International Trade



• WHY TRADE? - we will use three models: Gravity, Ricardian, and the H-O model to look at why we trade
  
  
• Read Chapter 2 - Here's the PowerPoint Slides: Chapter 2 PPT
• Introduction to Chapter 2: The Basic Model
  • First remember Positive versus Normative Economics
  • General Equilibrium Model: Things are determined at the same time (simultaneously)... Assumptions:
    • 1. Rationality
    • 2. Two Countries
    • 3. All prices are known (no money illusion)(relative price)
    • 4. Land, Resources, and Technology do not change, at first (PPF)
    • 5. Perfect Competition - market prices - exists (no externalities in production)
    • 6. Labor, Capital (Investments), etc. flows easily (they are perfectly mobile)
    • 7. Community Indifference Curves (consumers preferences in each country)
  • A step-by-step discussion of Chapter 2
  • EIA numbers in a .pdf file - updated a week ago
  
  
  

  Week 1

August 27, 2018     Chapter 1: An Introduction to the Course

• The Syllabus
• The Outline
• The Course

August 29, 2018     Chapter 2: World Trade: An Overview

• Read Chapter 1 - Chapter 1 PPT
• What is International Economics About?
  • The Gains from Trade
  • The Pattern of Trade
  • How Much Trade
• International Finance
  • What are the four categories of resources and their payments?
  • What is an Entrepreneur and who is an example?
• Overview of the Text and the Class

[Parkes Home Page, Flagstaff, Arizona]

email: andrew at andrewparkes.com
Last Update: December 3, 2018
By Andrew L. H. Parkes, Ph. D.