International Economics Assignments Page, Fall 2019

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Week 1

August 26, 2019     Chapter 1: An Introduction to the Course

• The Syllabus
• The Outline
• The Course

August 28, 2019     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




Week 2

September 2, 2019     HAPPY LABOR DAY HOLIDAY!!!

September 4, 2019     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 3

September 9, 2019    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 11, 2019     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

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email: andrew at andrewparkes.com
Last Update: July 21, 2019
By Andrew L. H. Parkes, Ph. D.