Course Code and name

 

EKO 669 International Economics

Course Type

 

Elective

Course Credit

 

3 0 3

ECTS Credit

 

7

Lecturer

 

Assist. Prof. Lütfi Erden

Pre-requisite(s)

None

Course Length

 

1 semester / 3 hours each week

Course Content

Introduction

1) Krugman, Paul. "Is Free Trade Passe?" Journal of Economic Perspectives. Fall 1987, 131-44.

 

Part I: International Trade Theories

 

A. Ricardian Model

The 2-good Ricardian Model, General Equilibrium, Comparative Advantage and Gains from Trade, The Continuum Ricardian Model

 

2) Dornbusch, R., S. Fischer and P.A. Samuelson: Comparative Advantage, Trade and Payments in a Ricardian Model with a Continuum of Goods, American Economic Review, 1977.

 

3) Balassa, Bela “An empirical demonstration of classical comparative cost theory” Review of Economics and Statistics, 1963.

 

B.Heckscher-Ohlin Model

The 2 by 2 Models: Heckscher-Ohlin Theorem, The Stolper-Samuelson Theorem, Factor Intensity Reversal, the Rybczynski Theorem, Factor Price Equalization.

 

4) Leamer, Edward and James Levinsohn, “International Trade Theory: The Evidence” NBER Working Paper #4940

5) Trefler, Daniel, “The Case of the Missing Trade and Other Mysteries”, American Economic Review, 1995, 85(5), pages 1029-1046.

 

6) Davis, Donald R., David E. Weinstein, Scott C. Bradford and Kazushige Shimpo, “Using International and Japanese Regional Data to Determine When the Factor Abundance Theory of Trade Works”, American Economic Review, 1997, 87(3), pages 421-446.

 

*Davis, R. Donald “Intraindustry Trade: A Heckscher-Ohlin-Ricardo Approach” JIE, 39, 1995, 201-226.

 

C. INTERNATİONAL TRADE AND INCOME DISTRIBUTION

7) Freeman, Richard. "Are Your Wages Set In Beijing?" Journal of Economic Perspectives. Summer 1995. 15-32.

8) Wood, Adrian. "How Trade Hurt Unskilled Workers." Journal of Economic Perspectives. Summer 1995. 57-80.

9) Feenstra, Robert C. "Integration of Trade and Disintegration of Production in the Global Economy." Journal of Economic Perspectives. Fall 1998. 31-50.

*Krugman, Paul. "Growing World Trade: Causes and Consequences." Brookings Papers on Economic Activity. 1995. 1.

 

*Leamer, Edward, “Trade, Wages and the Revolving Door Ideas, NBER Working Paper, #4716, 1994.

 

*Leamer, Edward, “What's the use of factor contents?” NBER Working Paper #5448, 1996.

 

d. INCREASING RETURNS AND mONOLPOLISTIC COMPETITION

10) Krugman, Paul “Increasing returns, monopolistic competition, and international trade” JIE, 1979, v9.

 

E. INTERNATIONAL TRADE AND GROWTH

15) Edwards, Sebastian. "Openness, Productivity, and Growth: What do we Really Know?" Economic Journal. 108 (447). March 1998. 383-98.

16) Frankel, Jeffrey and David Romer. 1999. "Does Trade Cause Growth?" American Economic Review. 89 (3). 379-99.

 Part 2. International Trade Policy

 

F. Polıcy ınstruments

Tariffs, Non-Tariff Instruments, Quotas, Voluntary Export Restraints

11) Feenstra, Robert C. "How Costly is Protectionism?" Journal of Economic Perspectives. Summer 1992. 159-178.

12) Gresser, Edward. "Toughest on the Poor: Americas Flawed Tariff System." Foreign Affairs. 81(6). November/December 2002. 9-14.

13) Trefler, Daniel, “Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy”, Journal of Political Economy, 101(1), 1993.

*Goldberg, Pinelopi and Giovanni Maggi, “Protection for Sale: An Empirical Investigation”, American Economic Review, 89(5), 1999.

14) Berry, S., Levinsohn, J. and A. Pakes, “Voluntary Export Restraints on Automobiles: Evaluating a Trade Policy”, American Economic Review, 89(3), June 1999, pages 400-430.

G. INTERNATIONAL TRADE AND DEVELOPING ECONOMIES

17) Dollar, David and Kraay, Aart. "Spreading the Wealth". Foreign Affairs. January/February 2002. 120-33.

 

18) Rodrik, Dani. "Trading in Illusions." Foreign Policy. March 2001. 54-62.

19) Bruton, Henry J. "A Reconsideration of Import Substitution." Journal of Economic Literature. June 1998. 903-936.

H. WORLD TRADE SYSTEMS

GATT, WTO, Custom Unions

 

20) Bagwell, Kyle and Robert W. Staiger, "An Economic Theory of GATT," American Economic Review; 89(1), March 1999, pages 215-48.

 

*Levy, P.L. “A Political economy analysis of free trade agreements” AER, 87(4), 1997, 506-519.

Course Objective and Fulfillments to be obtained by Students

 

This course focuses on the theoretical and empirical issues in international economics literature. At the end of this course, students should be able to: understand international trade theories (Traditional and New) and international trade policies such as tariffs, quotas, voluntary export restraints and the role of integration.

References

 

1- Feenstra, R. C. 2004. Advanced International Trade: Theory and Evidence, Princeton: Princeton University Press.

2- Dixit, A. K. and V. Norman. 1980. Theory of International Trade. Cambridge: Cambridge University Press.

3- Ethier, W. J., E. Helpman and J. P. Neary (Eds.) 1993. Theory, Policy and Dynamics in International Trade, Cambridge: Cambridge University Press.

Teaching Method

 

Lecture and presentation and term paper

Assessment Method

Final %35 , presentations %15 and term paper %50

Instruction Language

 English