ITRN 504:  TRADE AND  MICROECONOMICS FOR INTERNATIONAL COMMERCE

George Mason University: The Institute of Public Policy                                               Fall 2001

 

Professor: G. Chris Rodrigo  Tel: 703-993-8223  E-mail: crodrigo@gmu.edu   Room: ARL 212

Office hours: by appointment. E-mail is the main means of communication, so it is important that you keep me updated with your most recent e-mail address.

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This course aims to provide an introduction to basic microeconomic theory and key concepts in international trade. It explains the economic logic that drives the worldwide expansion of trade in goods and services and foreign direct investment. It is thus a necessary prerequisite to the understanding of international business activity and the processes of ‘globalization’. The main areas to be covered are basic economic concepts, supply and demand analysis, the role of the government, economics of business and industry, traditional theories of trade, new trade theory, trade regulation and other policy issues and the broader consequences of international commerce for economic growth and welfare. The political economy issues of why some social groups oppose trade liberalization, while others support it, are also introduced.

 

The final grade will be made up as follows.

 

Review paper or presentation                            10 %

Mid-term exam                                                 40 %               

Final exam                                                        40 %   

Exercises and class participation                        10 %

 

A review paper or presentation on a chosen topic will be undertaken by each student. Students are encouraged to do presentations in pairs. The topics for the paper or class presentation  will in general be chosen from a list prepared by the instructor, with definite delivery dates. This list will conform closely to the topics and readings listed below. Students who have some special interest or expertise in a topic that is not in the list, but falls within the  purview of this course, can work on it provided it is previously negotiated  with the instructor.  Each student need speak for only 10-15 minutes; an extra 5 minutes will be allowed for discussion.

 

In-class or take home exercises.  Several short exercises will be assigned over the duration of the course, to ensure that the basic concepts are assimilated. Note that though the exercises count for 10% of the final grade, they may be critical in case your performance in other areas is marginal.

 

All take home work must handed in as hard copies, typed or printed, with a 12 point font and one inch margins. The review paper must not be more than 2 pages, single spaced or 4 pages if double spaced. If a presentation is made, an outline of the presentation must be submitted

as a part of the exercise. All sources must be cited in full. References, notes, diagrams, graphs and appendices can be on additional pages. E-mailed or faxed submissions of take home work will not in general be accepted.

 

Students are encouraged to contact the instructor either individually or in groups for topics that need clarification or any other issue or problem. Consultations are by appointment in Room 212.

 

Course schedule and readings

 

            Readings are taken from the following texts which are available in the Arlington Bookstore. Other sources that would supplement the listed readings are the website for the Mankiw book at http://www.dryden.com/econ/ and the Economist at  http://www.economist.com/

 

1. N. Gregory Mankiw, Principles of Economics, Dryden, 2000                                                      (M)

2. Mordechai E. Kreinin, International Economics: a Policy Approach, Dryden, 1998                       (K)

 

Week 1.           Introduction to trade and basic economic theory.                                                 M 1-3

 

Week 2.           Supply, demand and government policies.                                                           M 4-6

 

Week 3            Consumer and producer surplus and taxes.                                                          M 7-9

 

Week 4            Production and competitive markets                                                          M 13-14, 24

 

Week 5            More on market structure                                                                               M 15-17

 

Week 6            The role of the government: externalities, public goods and taxes.                     M 10-12

 

Week 7            First examination (in-class).

 

Week 8            Trade based on absolute and comparative advantage.                                          K 1-2

 

Week 9            Other theories of trade                                                                                            K 3

 

Week 10          Tariff barriers.                                                                                                         K 4

 

Week 11          Non-tariff barriers.                                                                                                  K 5

 

Week 12          Political economy of trade.                                                                                      K 6

 

Week 13          GATT, WTO and preferential trading areas                                                            K 7

 

Week 14          Trade and the global economy.                                                                            K 8-9

 

Final examination (in-class)