Economics 181, Fall 1998

International Trade

Instructor: Elisabeth Sadoulet

GSIs: Doug Almond, Jose Lopez-Cordova, Petra Moser

Wednesday & Friday, 12:30 to 2:00pm, 155 Dwinelle

This is a four units course with three hours of lecture and one hour of discussion per week. Information on the course, including office hours, past assignments and examinations, required readings, and current assignments are available from the course's homepage on the Internet at the following address:
 

http://are.berkeley.edu/courses/ECON181
 

Textbooks:

  • Paul Krugman and Maurice Obstfeld (K&O), International Economics: Theory and Policy, Addison–Wesley, Fourth Edition, 1994.
  • Reader: Econ 181. Sold at Vick Copy, 1879 Euclid Avenue.
  • Section times and locations:

    Attendance to the discussion sections is mandatory. Sections are scheduled as follows: Section 101, Tuesday, 8-9am, 210 McLaughin, Petra

    Section 102, Tuesday, 9-10am, 285 Cory, Petra

    Section 103, Thursday, 3-4pm,105 Stanley, Doug

    Section 104, Thursday, 4-5pm, 71 Evans, Doug

    Section 105, Monday, 3-4pm, C 335 Cheit, Jose

    Section 106, Monday, 4-5pm, CANCELLED

    Section 107, Wednesday, 3-4pm, 219 Gilman, Jose

    Prerequisites

    Econ 100 A&B, or Econ 101 A&B, or PENR 100, or consent of instructor.
     

    Requirements

     1. Assignments

    There will be five assignments during the semester, but only your best 4 assignments will count for your final grade. Assignments are due at beginning of class on the following dates:
     
    Wednesday, September 9
    Assignment 1
    Wednesday, September 30
    Assignment 2 
    Wednesday, October 21
    Assignment 3 
    Wednesday, November 11
    Assignment 4 
    Wednesday, December 2
    Assignment 5

    Assignments will be given to the students two weeks before the due date. The text can also be retrieved from the course homepage. Late homeworks loose 2 points (out of 7) per day (note that assignments are late whenever submitted later than 12:40 pm on the due date). Assignment 5 will not be accepted late. Late homeworks must be handed directly to your TA or to professor Sadoulet, not left in TA mailboxes. Acknowledgment of receipt of homeworks will be posted on the homepage within 48 hours. Answers to the homeworks will be posted on the homepage one week after their due date.
     

    2. Examinations

    There will be a mid-term and a final examination on the following dates:
       

    Policy on missed mid-term or final exam:

    There is no scheduled make-up midterm or final exam. Students who miss an exam for any reason must communicate with Professor Sadoulet by e-mail or phone by 5:00 p.m. on the day of the exam (email: sadoulet@are; tel. 642 7225). Students need to have a written certificate from a medical or legal authority justifying the reason for having missed the examination.

    For a missed mid-term, the student will take the mid-term as an open book take home examination. If the answers are of A quality, the final examination will be counted for 72% of the grade instead of 45. Failure of the above will result in a 0 score for the mid-term.

    For a missed final exam, an "incomplete" grade will be given for the class. The student will have to take the final exam at another session. Econ 181 classes are regularly offered in summer and fall sessions every year. Failure of the above will result in a 0 score for the final.
     

    Fire Alarm Policy:

    A truly annoying bad habit at UCB is the pulling of fire alarms by ill-prepared and selfish students. This is a felony crime, punishable by a fine and time in jail. In addition, anyone caught pulling the alarm will fail the course and is subject to expulsion from the University. If the alarm is pulled during an exam, the class will move outside and finish the exam in the allotted time.
     

    3. Grades

    The grade for the course will be based on the following components:
     
    Exercises: Four times 7 percent = 28 percent 

    Mid-term: 27 percent 

    Final: 45 percent. 

     

    Office hours and E-mail addresses

    Elisabeth Sadoulet: Giannini Hall 213, Friday 2-4 pm; sadoulet@are.berkeley.edu

    Doug Almond: Evans 608-2, Friday 2-4pm; almond@econ.berkeley.edu

    Jose Lopez-Cordova: Evans 608-8, Friday 2-4pm; jelopez@econ.berkeley.edu

    Petra Moser: Evans , Friday 2-4pm; moser@econ.berkeley.edu
     

    Course outline and reading list

    Specific reading assignments will be given at each class meeting and an updated list posted on the course homepage.
     
     Week 1 Issues in international trade
    K&O, Chapter 1
    The Economist: "War of the Worlds", October 1994, pp.1-5
    Weeks 1–2 Labor productivity and comparative advantage: the Ricardian Model
    K&O, Chapter 2
    Krugman: "What do Undergrads need to Know About Trade" American Economic Review, May 1993
    Weeks 3–4 Specific factors and income distribution 
    K&O Chapter 3
    New York Times: Crawfish Wars: Cajun Country vs. China 5/7/97 
    Weeks 4-5 Resources and trade: The Heckscher-Ohlin model 
    K&O, Chapter 4 
    The Economist: "The War of the Worlds", October 1994, pp.14-19 
    Week 6  Guest speaker: Harley Shaiken      
    Week 7 The standard trade model
    K&O, Chapter 5 
     
     
    Week 8 - Wednesday October 14 - Midterm
     
    Weeks 8-9  Economies of scale, imperfect competition, and international trade 
    K&O, Chapter 6
     
    Weeks 9-10 International factor movements and foreign direct investment 
    K&O, Chapter 7
     
    Week 11  Instruments of trade policy 
    K&O, Chapter 8
    New York Times: Europe’s Banning of Treated Beef is Ruled Illegal" 5/9/97.
    Week 12  The political economy of trade policy 
    K&O, Chapter 9
     
    Newsweek: "The BananaWars" 4/28/97. 
    Week 13  Trade and the environment, by David Zibermann    Reader: "Environmental Aspects of Economic Relations Between Nations". 
    Week 13 Trade policy in developing countries
    K&O, Chapter 10
     
    Weeks 14-15 Strategic trade policies in advanced countries 
    K&O, Chapter 11
     
     
    Week 15 – Friday – Review session
    Tuesday December 15, 5-8 pm– Final Examination