Econ 0500: Intro to International Economics Syllabus

University of Pittsburgh Department of Economics CRN: 18360 and 18361 Econ 0500: Intro to International Economics Syllabus Lecturer: Svitlana Maksymenko, Ph.D. Office: 4703 Posvar Hall Tel: 412-383-8155 Fax: 412-648-1793 E-mail: maks@pitt.edu Class meets Tuesdays and Thursdays CRN 18360 2:30-3:45 pm CRN 18361 4:00-5:15 pm at 4900 Posvar Hall. Office hours Tuesdays 1:00-2:30 pm. Additional hours are available by appointment and must be scheduled at least two days in advance via e-mail. Out-of-classroom communication E-mail is the preferred method of out-of-classroom communication. I will make every effort to answer all e-mails within 24 hours. I will employ a CourseWeb (http://courseweb.pitt.edu) email option to report exam statistics and notify students about changes to the course calendar (if any). It is a student s responsibility to check the university email account on a regular basis, keep it under quota, or use email forwarding in case an alternative email account is accessed more often. Course Objectives This course introduces undergraduate students to the theory of International Economics and its application to the real world. Upon completion of this course students will be able to: Compare alternative theories of international trade Analyze and test international trade models Evaluate the impact of tariffs and non-tariff barriers Identify the validity and efficiency of protectionist policies Estimate the impact of preferential trade arrangements Read and analyze the nation s balance of payment Understand how a foreign exchange market operates 1

Predict movements in the value of the U.S. dollar and other currencies in response to changes in the world economy and macroeconomic policies Compare the exchange rate regimes and international monetary standards Analyze international investment, banking, debt, and risk Explain financial crises in emerging economies, their causes and solutions At the end of the course, students should be able to analyze current international trade issues, and critically evaluate the policy options. Prerequisites Macroeconomic and Microeconomic Principles Competence in basic algebra and geometry Text and Instructional Support The text is International Economics by Husted/Melvin, 8 th ed., published by Pearson Education, copyright 2010, ISBN 978-0321-594563. You can also use: The 8 th edition Study Guide by Eugenio Suarez to accompany the text, published by Pearson Education, copyright 2010, 978-0321-613325 Course website: www.aw-bc.com/husted_melvin Globalizing Capital: A History of the International Monetary System by Barry Eichengreen, 2 ed, Princeton University Press, copyright 2008, ISBN 978-0-691-13937-1. The Economist.com Edition, the Wall Street Journal Edition, and the Financial Times Edition. It is your responsibility to read the text carefully and to do all homework assignments. I will reserve a Study Guide in the Hillman Library. Please feel free to use it while working on the homework assignments, or preparing for the tests. Class rules Your presence in the classroom is required. You must arrive and be at your seat before the class starts. Please don t come to the class late. If you face an emergency, notify me as soon as possible by phone or e-mail. You can rewrite the lecture notes from your colleagues later or ask me for a copy. While in class, I will not allow students to make noise or otherwise distract their classmates. If you want to ask a question, raise your hand and I will call on you. The use of cellular phones, pagers, and other similar devices is prohibited. 2

Students with disabilities Any student with a need for special accommodation due to disability should inform me of this. The Disability Resources and Services Office (216 William Pitt Union, 412-624- 7890) will coordinate the needed accommodations. Class cancellations Any class cancellations due to bad weather are determined by the university administration and are announced on the university web site. Exams Course Requirements Dates of the exams are contained in the detailed plan of the course below. Exams include multiple choice questions, and a problem solving section. Exams are not cumulative. I do not offer make-up exams, with one exception: if you notify me or the department secretary of a serious reason (such as hospitalization) for missing an exam. This notification should be given prior to the exam. After each exam, I post answer keys, students scores, and exam statistics (i.e. class average, class highest, and class lowest scores) on the Courseweb. Assignments Homework assignments are on-line assignments available on the Courseweb (http://courseweb.pitt.edu), with the deadlines reported in the Course Calendar below. Assignments are not accessible after the date due. Please print and go over each assignment prior to the exams: you will find it very helpful. You are encouraged to study in groups. It will make your studies more productive and fun. If you work on the assignment in a team, please inform me about it. Academic Integrity Students in this course are expected to comply with the University of Pittsburgh s Policy on Academic Integrity. Any student suspected of violating this obligation will be required to participate in the procedures outlined in the University Guidelines on Academic Integrity. Interpretation of plagiarism may be found in Appendix A of the School s Handbook of Academic Policies and Procedures. Grading Attendance is required but not graded. Remember: missing classes will seriously compromise your performance in the course. I take attendance simultaneously. There is no curving. Your course grade is computed with the following weights: On-line assignments 25 percent Exam 1 25 percent 3

Exam 2 25 percent Exam 3 25 percent I compute student s course grade by incorporating scores earned on exams, and homework assignments weighted as indicated above. A student fails the class if a so determined course score is below 60%. The rest are graded based on the following scale: 90-100 A range 80-89 B range 70-79 C range 60-69 D range Course Calendar Date Jan 5 Jan 10 Jan 12 Jan 17 Jan 19 Jan 24 Jan 26 Jan 31 Feb 2 Feb 7 Feb 9 Feb 14 Feb 16 Feb 21 Feb 23 Feb 28 Mar 1 Mar 13 Mar 15 Mar 20 Mar 22 Mar 27 Mar 29 Apr 3 Apr 5 Apr 10 Apr 12 Lecture An Introduction to International Trade Tools of Analysis for International Trade Models The Classic Model of International Trade The Heckscher-Ohlin Model Tests of Trade Models Alternative Theories Assignment #1 (Ch 1-5) is due 2:30 pm. Ch1-5 Overview Exam # 1 Tariffs Non-tariff Barriers Commercial Policy Preferential Trade Arrangements Spring Break Preferential Trade Arrangements (cont) International Trade and Economic Growth Assignment #2 (Ch 6-10) is due 2:30 pm. Overview of Ch 6-10 Exam #2 An Introduction to International Finance The Balance of Payment The Foreign Exchange Market Presentation by a trader Prices and Exchange Rates. Purchasing Power Parity Interest rates and Exchange Rates 4

Apr 17 Apr 19 Alternative International Money Standards. Overview Assignment #3 (Ch 11-15 and Ch 19) is due 2:30 pm Exam # 3 5

University of Pittsburgh Department of Economics CRN 22755 Econ 0500: Intro to International Economics Syllabus Lecturer: Svitlana V Maksymenko, Ph.D. Office: 4703 Posvar Hall Tel: 412-383-8155 Fax: 412-648-1793 E-mail: maks@pitt.edu Class meets Mondays and Wednesdays 3:00 4:15 p.m. at Lawrence Hall 104. Office hours Mondays and Wednesdays 2:00-2:45 pm. Additional hours are available by appointment and must be scheduled at least two days in advance via e-mail. Out-of-classroom communication E-mail is the preferred method of out-of-classroom communication. I will make every effort to answer all e-mails within 24 hours. I will employ a CourseWeb (http://courseweb.pitt.edu) email option to report exam statistics and notify students about changes to the course calendar (if any). It is a student s responsibility to check the university email account on a regular basis, and keep it under the quota. Course Objectives This course introduces undergraduate students to the theory of International Economics and its application to the real world. Upon completion of this course students will be able to: Compare alternative theories of international trade Analyze and test international trade models Evaluate the impact of tariffs and non-tariff barriers Identify the validity and efficiency of protectionist policies Estimate the impact of preferential trade arrangements Read and analyze the nation s balance of payment Understand how the foreign exchange market operates Predict movements in the value of the U.S. dollar and other currencies in response to changes in the world economy and macroeconomic policies Compare the exchange rate regimes and international monetary standards Analyze international investment, banking, debt, and risk Explain financial crises in emerging economies, their causes and solutions

At the end of the course, students should be able to analyze current international trade issues, and critically evaluate the policy options. Prerequisites Macroeconomic and Microeconomic Principles Competence in basic algebra and geometry Text and Instructional Support Required: International Economics by Husted/Melvin, 9 th ed., published by Pearson Education, copyright 2013, ISBN 978-0321-783868. Recommended: The 8 th edition Study Guide by Eugenio Suarez to accompany the text, published by Pearson Education, copyright 2010, ISBN: 978-0321-613325 Course website: www.aw-bc.com/husted_melvin Globalizing Capital: A History of the International Monetary System by Barry Eichengreen, 2 ed, Princeton University Press, copyright 2008, ISBN 978-0-691-13937-1. Trade and Globalization: An Introduction to Regional Trade Agreements by David Lynch, Rowman and Littefield Publishers, ISBN: 978-0-7425-6689-7. The textbook is available in the bookstore and you should purchase it immediately. It is your responsibility to read the text carefully and to do all homework assignments. I have several earlier editions Study Guides in my office and can lend them to you. Please feel free to use them while working on the homework assignments, or preparing for the tests. Class rules Your presence in the classroom is required. You must arrive and be at your seat before the time the class starts. Please don t come to the class late. If you face an emergency, notify me as soon as possible by phone or e-mail. You can rewrite the lecture notes from your colleagues later or ask me for a copy. While in class, I will not allow students to make noise or otherwise distract their classmates. If you want to ask a question, raise your hand and I will call on you. The use of cellular phones, pagers, and other similar devices is prohibited. Students with disabilities Any student with a need for special accommodation due to disability should inform me of this. The Disability Resources and Services Office will coordinate the needed accommodations. Class cancellations Any class cancellations due to bad weather are determined by the university administration and are announced on the university web site. 2

Exams Dates of the exams are contained in the detailed plan of the course below. Exams include multiple choice questions, and a problem solving section. All exams are not cumulative. I do not offer make-up exams, with one exception: if you notify me or the department secretary as soon as possible of a serious reason (such as hospitalization) for missing an exam. This notification should be given prior to the exam. Assignments All homework assignments are on-line assignments available on the Courseweb. Please make sure to print and go over each assignment prior to exam: you will find it very helpful. On average, you will have more than three weeks to complete a set of assignments. Do not postpone it to the date due. Late assignments are not accepted. You are encouraged to study in groups. It will make your studies productive and fun. If you work on a homework assignment in a group, please inform me about it. Each student is required to submit homework assignment on-line individually. Academic Integrity Students in this course are expected to comply with the University of Pittsburgh s Policy on Academic Integrity. Any student suspected of violating this obligation will be required to participate in the procedures outlined in the University Guidelines on Academic Integrity. Definition of plagiarism can be found on the University website. Help The material of the course is highly cumulative. If you do not understand something, please seek help immediately. You are welcome to come to my office and discuss problems you face with the material presented. Grading Attendance is required but not graded. Remember: missing classes will seriously compromise your performance in the course. I will take the attendance simultaneously. Participation in problem solving during the class is a plus, and is the only extra credit offered if you end up on a grade margin. There will be no curving. Your course grade will be computed with the following weights: Homework assignments 25 percent Exam 1 25 percent Exam 2 25 percent Exam 3 25 percent After each exam, I will provide you with your score (posted on the Blackboard), and exam statistics (i.e. class average, class highest, and class lowest scores). 3

The course letter grade will be determined as follows. After the final exam I will compute course scores incorporating scores earned on exams and group assignments weighted as indicated above. A student fails the class if a so determined course score is below 60. The rest will be graded based on the following scale: 90-100 A range 80-89 B range 70-79 C range 60-69 D range Course Calendar * Week Date Lecture Week 1 Aug 27 An Introduction to International Trade. Aug 29 Week 2 Sept 3 Sept 5 Labor day (University closed) Tools of Analysis for International Trade Models Week 3 Sept 10 The Classic Model of International Trade Sept 12 Week 4 Sept 17 The Heckscher-Ohlin Model Sept 19 Week 5 Sept 24 Sept 26 Empirical Tests of Trade Models Alternative Theories of IT Week 6 Oct 1 Oct 3 Assignments Ch1-5 are due 3:00 pm. Ch1-5 overview Exam #1 Week 7 Oct 8 Oct 9 Fall Break (Monday classes meet Tuesday) Tariffs Oct 10 Week 8 Oct 15 Oct 17 Non-tariff Barriers Arguments for Protection Week 9 Oct 22 Oct 24 US Commercial Policy Preferential Trade Arrangements Week 10 Oct 29 International Trade and Economic Growth Oct 31 Week 11 Nov 5 Nov 7 Assignments Ch6-10 are due 3:00 pm. Ch 6-10 overview Exam #2 Week 12 Nov 12 Nov 14 The Balance of Payments Foreign Exchange Market Week 12 Nov 19 Nov 21 International Monetary Systems Thanksgiving Recess Week 13 Nov 26 Nov 28 Exchange Rates in a Short Run Exchange Rates in a Long Run Week 14 Dec 3 Dec 5 Theories of the Current Account Assignments Ch11-16 are due 3:00 pm. IF section overview Week of finals Wed, Dec 12 8:00-9:50am Exam #3 * Any changes to the course calendar will be posted on the CourseWeb. 4

Spring 2013 Course Information Economics 0500 - INTRODUCTION TO INTERNATIONAL ECONOMICS Instructor: Gregory (Greg) Whitten Phone: 412-648-2305 Office: 4516 W.W. Posvar Hall Office Hours: Wednesday 13h00 15h30 E-Mail: gww2@pitt.edu or whittengw@gmail.com Students should check CourseWeb regularly for announcements and material related to the class. E- mail is the best way to contact me. I am rarely in my office (I may reserve one of the conference rooms in the economics department to hold office hours). You may find me more easily in the Economics Graduate Lab (WWPH 4930) if you need to get ahold of me immediately. You may ask for individual meetings if my office hours are not convenient for you. If I am available, I will almost surely say yes. However, if you fail to arrive on time to a previously-scheduled meeting or fail to cancel within a reasonable (where I judge what is reasonable ) amount of time, I reserve the right to refuse any future request for an individual meeting with you. Text Steven Husted and Michael Melvin, International Economics, 9th ed. Addison-Wesley Publishers, 2013 (cited below as "HM"). I have placed a copy of this book on reserve at Hillman Library. Please note that the second half of the ninth edition is radically different from earlier editions. Therefore, using old editions may be problematic for topics in international finance (the second part of the course). Grading, homework, and exams The following components will determine your final grade: Homework (lowest-graded homework to be dropped) 30% First exam (anticipated date: 7 March 2013, but negotiable) 35% Second exam (final exam: date TBA) 35% No late homework will be accepted under any circumstances. Assignments will be due at 11h00 on the date indicated. All homework assignments must be typed. If circumstances prevent you from being in class to hand in the homework by 11h00, send it to me in an email before 11h00 or give a hard copy to your friends to hand in at 11h00. I will drop the homework with the lowest grade when calculating your average homework score for your final grade. There are no make-up exams. If you can demonstrate with appropriate documentation that a serious event, such as hospitalization, prevented you from taking an exam, I will count the remaining exam for 70% of your grade. If you miss both exams, you will receive 0 points for both exams.

Each homework assignment (unless otherwise specified) will consist of a set of questions analyzing a selected portion of an article. Each exam will have 2 such sets of questions and selected portions of an article. Each homework assignment will be worth 20 points (unless otherwise specified). Each exam will be worth 40 points (unless otherwise specified). The first exam will cover sections 1-5 (see below) while the second/final exam will cover sections 6-9. That is to say, the final exam is not comprehensive. However, I may choose to include questions covering some material from the first half of the course in the final exam, though such questions will constitute a small portion of the total coverage. I would include such questions in the event that the overall performance on the midterm exam indicated that a large number of students did not understand certain key concepts in trade. If I include such questions, I will let you know a few weeks before the final exam and will provide more detail regarding what material you should revise. To obtain full points on a homework assignment or an exam, a response must be clear and concise. There will often be limits on the length of your answers. Within these limits, the response must, where appropriate: apply theoretical concepts to a particular real-world example; evaluate the text, to an appropriate depth, for the concepts covered in class; support the evaluation with appropriate evidence and theory; adhere to the rules of spelling, word usage, and grammar. To emphasize the importance of the last point, I will deduct one point for every error of spelling, usage, or grammar found in your answers. If you make the exact same error twice, you will lose 2 points. This policy will apply to homework and to exams. Examples of statements that would reduce points include: Where the level of unemployment is at determines There are a series of reasons to explain why The affect of a common currency on trade differs across currency unions. Students who can demonstrate that their native language is not English may bring a simple, bilingual dictionary (an actual book, not an electronic resource) to the exam. In that event, please arrive early so that I can verify that no unauthorized materials (e.g., copies of notes) are hidden in the pages of the dictionary. Although students may consult with each other on the homework assignments, each student is responsible for submitting an original answer. If I discover two or more submitted assignments for a given homework that resemble each other substantially, I reserve the right to pursue the matter as a violation of the University s policy on Academic Integrity. The following table (starts on the next page) describes roughly how I intend to link scores on homework and exams to letter grades. I reserve the right to adjust the boundaries between one letter grade and another as circumstances dictate.

20 A+ 19 A 18 A 17 A- 16 A- 15 B+ 14 B+ Course Outline and Reading List 13 B+ 12 B 11 B 10 B- 9 C+ 8 C 7 C- 6 D+ 5 D 4 D- 3 F 2 F 1 F 1. Introduction HM Chapter 1 2. The Pure Theory of International Trade a. Tools of Analysis General Equilibrium for a Closed Economy HM Chapter 2 (stop at the section titled National Supply and Demand and omit the Appendix) b. Classical/Ricardian Model HM Chapter 3 (omit Appendices) c. The Heckshcer-Ohlin Model HM Chapter 4 (omit Appendices) d. The Leontief Paradox and Alternative Theories HM Chapter 5 3. Tariffs and other barriers to trade a. Gains from Free Trade HM Chapter 6 b. Introduction to tariffs HM Chapter 6 c. Effects of a Tariff HM Chapter 6 d. Export Tariffs HM Chapter 6 e. Non-tariff barriers HM Chapter 7 f. Arguments for protection HM Chapters 6 & 7 4. U.S. Commercial Policy HM Chapter 8 5. Customs Unions and Free Trade Areas HM Chapter 9 6. Basics of International Finance a. Balance of Payments (BOP) and BOP accounting HM Chapter 11 b. The foreign exchange markets HM Chapter 12 7. International Monetary Standards HM Chapter 13 a. The Gold Standard and its collapse b. The Bretton Woods system c. Today s system d. Choice of exchange rate regimes 8. Floating exchange rates a. Exchange rates in the short run HM Chapter 14 b. Exchange rates in the long run HM Chapter 15 9. Balance of Payments Adjustment a. BOP Equilibrium and Adjustment HM Chapter 11

b. Devaluation HM Chapter 16 c. Growth and the BOP HM Chapter 17 Class rules As you are all adults, I expect that you will act accordingly. In particular: Do not fall asleep in class. If you are tired, for whatever reason (late-night studying or late-night partying), do not come to class, but ask one of your classmates to provide you with notes from the lecture that you missed. Do not hold conversations with your classmates while I am talking. If you did not understand something that I said, feel free to raise your hand and ask me to repeat the information. I am happy to do so. If circumstances require that you arrive late or leave early, please do so with a minimum of fuss. That is to say, choose a seat in the classroom close to the door such that you do not have to cross in front of the entire class in order to enter or to leave. If you are bored out of your mind and cannot but help texting, reading a newspaper, or doing anything else similar, make sure I can t figure out that you are not paying attention. Academic Integrity Students in this course will be expected to comply with the University of Pittsburgh's Policy on Academic Integrity. Any student suspected of violating this obligation for any reason during the semester will be required to participate in the procedural process, initiated at the instructor level, as outlined in the University Guidelines on Academic Integrity. This may include, but is not limited to, the confiscation of the examination of any individual suspected of violating University Policy. Furthermore, no student may bring any unauthorized materials to an exam, including dictionaries and programmable calculators. Students with disabilities If you have a disability that requires special testing accommodations or other classroom modifications, you need to notify both the instructor and Disability Resources and Services no later than the second week of the term. You may be asked to provide documentation of your disability to determine the appropriateness of accommodations. To notify Disability Resources and Services, call (412) 648-7890 (Voice or TTD) to schedule an appointment. The Disability Resources and Services office is located in 140 William Pitt Union on the Oakland campus. Statement on Classroom Recording To ensure the free and open discussion of ideas, students may not record classroom lectures, discussion and/or activities without the advance written permission of the instructor, and any such recording properly approved in advance can be used solely for the student s own private use. Almost surely, if you ask to record a lecture because you sincerely believe that it will help you, I will give you permission, provided that you promise not to post the recording or distribute the recording by other means. I only ask that you follow the University policy and ask me in writing.

University of Pittsburgh Department of Economics CRN: 17485 and 17486 Econ 0500: Intro to International Economics Syllabus Lecturer: Svitlana Maksymenko, Ph.D. Office: 4703 Posvar Hall Tel: 412-383-8155 Fax: 412-648-1793 E-mail: maks@pitt.edu Class meets Tuesdays and Thursdays at 4900 Posvar Hall: CRN 17485 2:30-3:45pm CRN 17486 4:00-5:15 pm Office hours Tuesdays 1:00-2:30 pm. Additional hours are available by appointment and must be scheduled at least two days in advance via e-mail. Out-of-classroom communication E-mail is the preferred method of out-of-classroom communication. I will make every effort to answer all e-mails within 24 hours. I will employ a CourseWeb (http://courseweb.pitt.edu) email option to report exam statistics and notify students about changes to the course calendar (if any). It is a student s responsibility to check the university email account on a regular basis, keep it under quota, or use email forwarding in case an alternative email account is accessed more often. Course Objectives This course introduces undergraduate students to the theory of International Economics and its application to the real world. Upon completion of this course students will be able to: Compare alternative theories of international trade Analyze and test international trade models Evaluate the impact of tariffs and non-tariff barriers Identify the validity and efficiency of protectionist policies Estimate the impact of preferential trade arrangements Read and analyze the nation s balance of payment Understand how a foreign exchange market operates Predict movements in the value of the U.S. dollar and other currencies in response to changes in the world economy and macroeconomic policies 1

Compare the exchange rate regimes and international monetary standards Analyze international investment, banking, debt, and risk Explain financial crises in emerging economies, their causes and solutions At the end of the course, students should be able to analyze current international trade issues, and critically evaluate the policy options. Prerequisites Macroeconomic and Microeconomic Principles Competence in basic algebra and geometry Text and Instructional Support Required text: International Economics by Husted/Melvin, 9 th ed., published by Pearson Education, copyright 2013, ISBN 978-0321-783868 (hardcopy, US edition). The e-version of the text is available through CourseSmart website, ISBN: 978-0-13-276954-9. Recommended sources: The 8 th edition Study Guide by Eugenio Suarez to accompany the text, published by Pearson Education, copyright 2010, 978-0321-613325 Course website: www.aw-bc.com/husted_melvin Globalizing Capital: A History of the International Monetary System by Barry Eichengreen, 2 ed, Princeton University Press, copyright 2008, ISBN 978-0-691-13937-1. The Economist.com Edition, the Wall Street Journal Edition, and the Financial Times Edition. It is your responsibility to read the text carefully and to do all homework assignments. I will reserve a Study Guide in the Hillman Library. Please feel free to use it while working on the homework assignments, or preparing for the tests. Class rules Your presence in the classroom is required. You must arrive and be at your seat before the class starts. Please don t come to the class late. If you face an emergency, notify me as soon as possible by phone or e-mail. You can rewrite the lecture notes from your colleagues later or ask me for a copy. While in class, I will not allow students to make noise or otherwise distract their classmates. If you want to ask a question, raise your hand and I will call on you. The use of cellular phones, pagers, and other similar devices is prohibited. Students with disabilities 2

Any student with a need for special accommodation due to disability should inform me of this. The Disability Resources and Services Office (216 William Pitt Union, 412-624- 7890) will coordinate the needed accommodations. Class cancellations Any class cancellations due to bad weather are determined by the university administration and are announced on the university web site. Exams Course Requirements Dates of the exams are contained in the detailed plan of the course below. Exams include multiple choice questions, and a problem solving section. Exams are not cumulative. I do not offer make-up exams, with one exception: if you notify me or the department secretary of a serious reason (such as hospitalization) for missing an exam. This notification should be given prior to the exam. After each exam, I post answer keys, students scores, and exam statistics (i.e. class average, class highest, and class lowest scores) on the Courseweb. Assignments Homework assignments are on-line assignments available on the Courseweb (http://courseweb.pitt.edu), with the deadlines reported in the Course Calendar below. Assignments are not accessible after the date due. Please print and go over each assignment prior to the exams: you will find it very helpful. You are encouraged to study in groups. It will make your studies more productive and fun. If you work on the assignment in a team, please inform me about it. Academic Integrity Students in this course are expected to comply with the University of Pittsburgh s Policy on Academic Integrity. Any student suspected of violating this obligation will be required to participate in the procedures outlined in the University Guidelines on Academic Integrity. Interpretation of plagiarism may be found in Appendix A of the School s Handbook of Academic Policies and Procedures. Grading Attendance is required but not graded. Remember: missing classes will seriously compromise your performance in the course. I take attendance simultaneously. There is no curving. Your course grade is computed with the following weights: On-line assignments 25 percent Exam 1 25 percent Exam 2 25 percent Exam 3 25 percent 3

I compute student s course grade by incorporating scores earned on exams, and homework assignments weighted as indicated above. A student fails the class if a so determined course score is below 60%. The rest are graded based on the following scale: 90-100 A-, A, A+ 80-89 B-, B, B+ 70-79 C-, C, C+ 60-69 D-, D, D+ Course Calendar Date Jan 8 Jan 10 Jan 15 Jan 17 Jan 22 Jan 24 Jan 29 Jan 31 Feb 5 Feb 7 Feb 12 Feb 14 Feb 19 Feb 21 Feb 26 Feb 28 Mar 5 Mar 7 Mar 19 Mar 21 Mar 26 Mar 28 Apr 2 Apr 4 Apr 9 Apr 11 Apr 16 Apr 18 Lecture An Introduction to International Trade Tools of Analysis for International Trade Models The Classic Model of International Trade The Heckscher-Ohlin Model Tests of Trade Models Alternative Theories Exam#1 Overview (Ch1-5) Assignment #1 (Ch 1-5) is due 2:30 pm. Exam # 1 Tariffs Non-tariff Barriers Commercial Policy Preferential Trade Arrangements Spring Break International Trade and Economic Growth Exam#2 Overview (Ch 6-10) Assignment #2 (Ch 6-10) is due 2:30 pm. Exam #2 The Balance of Payment The Foreign Exchange Market Alternative International Money Standards Interest Rates and Exchange Rates Prices and Exchange Rates. Purchasing Power Parity. Exam#3 Overview Assignment #3 (Ch 11-15) is due 2:30 pm. Exam # 3 4

University of Pittsburgh Department of Economics CRN 21611 Econ 0500: Intro to International Economics Syllabus Lecturer: Svitlana Maksymenko, Ph.D. Office: 4703 Posvar Hall Tel: 412-383-8155 Fax: 412-648-1793 E-mail: maks@pitt.edu Class meets Mondays and Wednesdays 3:00 4:15 pm at the Cathedral of Learning 342. Office hours Mondays and Wednesdays 2:00-2:45 pm. Additional hours are available by appointment and must be scheduled at least two days in advance via e-mail. Out-of-classroom communication E-mail is the preferred method of out-of-classroom communication. I will make every effort to answer all e-mails within 24 hours. I will employ a CourseWeb (http://courseweb.pitt.edu) email option to report exam statistics and notify students about changes to the course calendar (if any). It is a student s responsibility to check the university email account on a regular basis, and keep it under the quota. Course Objectives This course introduces undergraduate students to the theory of International Economics and its application to the real world. 2/3 of the course is dedicated to international trade, and 1/3 to international finance theories. Upon completion of this course students will be able to: Know alternative theories of international trade Analyze and test international trade models Evaluate the impact of tariffs and non-tariff barriers Identify the validity and efficiency of protectionist policies Estimate the impact of preferential trade arrangements Read and analyze the nation s balance of payment Understand how the foreign exchange market operates Predict movements in the value of the U.S. dollar and other currencies in response to changes in the world economy and macroeconomic policies Compare the exchange rate regimes and international monetary standards Explain financial crises in emerging economies, their causes and solutions At the end of the course, students should be able to analyze current international trade issues, and critically evaluate policy options.

Prerequisites Macroeconomic and Microeconomic Principles Competence in basic algebra and geometry Text and Instructional Support Required: International Economics by Husted/Melvin, 9 th ed., published by Pearson Education, copyright 2013, ISBN 978-0321-783868. Recommended: The 8 th edition Study Guide by Eugenio Suarez to accompany the text, published by Pearson Education, copyright 2010, ISBN: 978-0321-613325 Course website: www.aw-bc.com/husted_melvin Globalizing Capital: A History of the International Monetary System by Barry Eichengreen, 2 ed, Princeton University Press, copyright 2008, ISBN 978-0-691-13937-1. Trade and Globalization: An Introduction to Regional Trade Agreements by David Lynch, Rowman and Littefield Publishers, ISBN: 978-0-7425-6689-7. The textbook is available in the bookstore and you should purchase it immediately. It is your responsibility to read the text carefully and to do all homework assignments. I have several earlier editions Study Guides in my office and can lend them to you. Please feel free to use them while working on the homework assignments, or preparing for the tests. Class rules Your presence in the classroom is required. You must arrive and be at your seat before the class starts. Please don t come to the class late. If you face an emergency, notify me as soon as possible by phone or e-mail. You can rewrite the lecture notes from your colleagues later or ask me for a copy. While in class, I will not allow students to make noise or otherwise distract their classmates. If you want to ask a question, raise your hand and I will call on you. The use of cellular phones, pagers, and other similar devices is prohibited. Students with disabilities Any student with a need for special accommodation due to disability should inform me of this. The Disability Resources and Services Office will coordinate the needed accommodations. Class cancellations Any class cancellations due to bad weather are determined by the university administration and are announced on the university web site. Exams 2

Dates of the exams are contained in the detailed plan of the course below. Exams include multiple choice questions, and a problem solving section. All exams are not cumulative. I do not offer make-up exams, with one exception: if you notify me or the department secretary as soon as possible of a serious reason (such as hospitalization) for missing an exam. This notification should be given prior to the exam. Assignments All homework assignments are on-line assignments available on the Courseweb. Please make sure to print and go over each assignment prior to exam: you will find it very helpful. On average, you will have four weeks to complete a set of assignments. Do not postpone it to the date due. Late assignments are not accepted. You are encouraged to study in groups. It will make your studies productive and fun. If you work on a homework assignment in a group, please inform me about it. Each student is required to submit homework assignment on-line individually. Academic Integrity Students in this course are expected to comply with the University of Pittsburgh s Policy on Academic Integrity. Any student suspected of violating this obligation will be required to participate in the procedures outlined in the University Guidelines on Academic Integrity. Definition of plagiarism can be found on the University website. Help The material of the course is highly cumulative. If you do not understand something, please seek help immediately. You are welcome to come to my office and discuss problems you face with the material presented. Grading Attendance is required but not graded. Remember: missing classes will seriously compromise your performance in the course. I will take the attendance simultaneously. Participation in problem solving during the class is a plus, and is the only extra credit offered if you end up on a grade margin. There will be no curving. Your course grade will be computed with the following weights: Homework assignments 25 percent Exam 1 25 percent Exam 2 25 percent Exam 3 25 percent After each exam, the students scores and exam statistics (i.e. class average, class highest, and class lowest scores) will be posted on the Courseweb. The course letter grade will be determined as follows. After the final exam I will compute course scores incorporating scores earned on exams and group assignments weighted as 3

indicated above. A student fails the class if a so determined course score is below 60. The rest will be graded based on the following scale: 90-100 A range 80-89 B range 70-79 C range 60-69 D range Course Calendar * Week Date Lecture Week 1 Aug 26 Aug 28 Week 2 Sept 2 Sept 4 Week 3 Sept 9 Sept 11 Week 4 Sept 16 Sept 18 Week 5 Sept 23 Sept 25 Week 6 Sept 30 Oct 2 Week 7 Oct 7 Oct 9 Week 8 Oct 14 Oct 15 Oct 16 Week 9 Oct 21 Oct 23 Week 10 Oct 28 Oct 30 Week 11 Nov 4 Nov 6 Week 12 Nov 11 Nov 13 Week 12 Nov 18 Nov 20 Week 13 Nov 25 Nov 27 Week 14 Dec 2 Dec 4 Week of finals An Introduction to International Trade. Labor day (University closed) Tools of Analysis for International Trade Models The Classic Model of International Trade The Heckscher-Ohlin Model Empirical Tests of Trade Models Alternative Theories of IT Assignments Ch1-5 are due 3:00 pm. Ch1-5 overview Exam #1 Tariffs Fall Break (Monday classes meet Tuesday) Non-tariff Barriers Arguments for Protection US Commercial Policy Preferential Trade Arrangements International Trade and Economic Growth Assignments Ch6-10 are due 3:00 pm. Ch 6-10 overview Exam #2 The Balance of Payments Foreign Exchange Market International Monetary Systems Exchange Rates in a Short Run Thanksgiving Recess Exchange Rates in a Long Run Assignments Ch11-16 are due 3:00 pm. IF section overview Tue, Dec 10 4:00 5:50pm Exam #3 Room - TBA * Any changes to the course calendar will be posted on the CourseWeb. 4

University of Pittsburgh Fall 2013 Econ 0500 (CLS #10998) Tekin Kose ECON 0500 INTRODUCTION TO INTERNATIONAL ECONOMICS Term 2141 Time: Monday & Wednesday 4:30 pm 5:45 pm Location: 342 Cathedral of Learning Instructor: Tekin Kose Office: 4521 W. W. Posvar Hall Office Tel: 412-648-7039 E-mail: tek11@pitt.edu Office Hours: Monday & Wednesday 3:00pm 4:00pm (Or by appointment which must be scheduled at least a day in advance via e-mail.) Prerequisites: Macroeconomic and Microeconomic Principles (Econ0100 and Econ0110) Competence in Basic algebra and Geometry (and Introductory Calculus) Course Materials: 1. Slides and Practice Problem Sets (They will be available online at CourseWeb) CourseWeb: http://courseweb.pitt.edu/ 2. Required Text: International Economics by Husted/Melvin, 9th ed., published by Pearson Education, ISBN 978-0321783868. Suggested Reading: Globalizing Capital: A History of the International Monetary System by Barry Eichengreen, 2th ed., Princeton University Press, copyright 2008, ISBN 978-0-691-13937-1. The Dominance of the Dollar and Its Sustainability in the International Monetary System by Tekin Kose (M.S. Thesis, METU 2008). Available at: http://etd.lib.metu.edu.tr/upload/12609605/index.pdf The Economist.com Edition, the Wall Street Journal Edition, and the Financial Times Edition. Levitt and Dubner, Freakonomics [Revised and Expanded]: A Rogue Economist Explores the Hidden Side of Everything, New York: HarperCollins Publishers, 2006. Course Objectives: This is an undergraduate course to introduce concepts of International Trade and International Finance. The aim of this course is to introduce the student to the tools economists use to analyze the economic issues (such as trade, international factor movements, current account imbalances, exchange rate volatility) resulting from the interaction of a country with rest of the world in international markets. The nature and method of decision-making agents (i.e. consumers, producers, and governments) in international markets will be analyzed. 1

University of Pittsburgh Fall 2013 Econ 0500 (CLS #10998) Tekin Kose After a successful finishing of the course, the student should be able to 1) Define and explain the basic concepts in International Economics; Analyze and compare alternative theories of international trade Evaluate the impacts, efficiency and validity of protectionist policies Analyze the nation s balance of payment Understand how a foreign exchange market operates in response to changes in the world economy and macroeconomic policies Compare different exchange rate regimes and international monetary standards Analyze international investment, banking, debt, and risk Understand financial crises in emerging economies, their causes and solutions 2) Analyze real-life international economic situations using the tools introduced in the course. 3) Develop a better understanding of the role of International Economics in operation of the global society. 4) Form an idea about the interaction of International Economics with other disciplines such as (but not limited to) International Relations, Political Science, Sociology. Course Requirements & Grading: Pop-Quizzes (6, Lowest grade to be dropped) 20x5=100 Term Project....150 Exam 1....250 Exam 2...250 Exam 3...250 Total..1000 EXAMS ARE CLOSED BOOK AND NON-CUMULATIVE: You may need a calculator. Exams consist of multiple choice problems. Quizzes may have any type of question. Grading Scale: 900-1000 A Range 775-899 B Range 650-774 C Range 526-649 D Range < 525 F Your quiz, exam, and project grades will be posted on Courseweb. After your grades have been posted, you have 5 days to request a correction. Otherwise, your grade will remain unchanged. Academic Integrity: Students are expected to adhere to the University s Academic Integrity Policy in this class. For example, if you are caught cheating on any of the exams, you will receive a score of zero on that exam. For further details, refer to the Academic Integrity Code of the University: http://www.pitt.edu/~provost/ai1.html 2

University of Pittsburgh Fall 2013 Econ 0500 (CLS #10998) Tekin Kose Special Considerations: If you need special accommodations due to disability, please notify the instructor and the Office of Disability Resources and Services (DRS) no later than the end of the first week of the term. DRS is located at 216 William Pitt Union (412-648-7890). DRS are available for students who have or may request an accommodation for a disability (see http://www.drs.pitt.edu/services.html for details). Feedback: Please feel free to provide feedback so that I can improve on my teaching you. This includes not only style (speed, clarity, presentation) but in particular content; e.g. if you think that we are not doing enough exercises, examples or you think one topic was not presented properly, etc. I am happy to receive and accommodate feedback. Feedback can be provided verbally (after class time, during office hours) or written (email, note). Of course, you should also tell about the things you like in the course so that we keep doing them. Occasionally, I may ask you to write down an anonymous comment at the end of class for feedback. Tentative Course Outline: Week Date Topics Lecture numbers and book chapter numbers may not coincide! Readings 1 Aug 26 Aug 28 2 Sept 2 Sept 4 Introduction to Class An Introduction to International Trade Tools of Analysis for International Trade Models Labor day (University closed) The Classic Model of International Trade Ch 1&2 Ch 3 3 Sept 9 The Heckscher-Ohlin Model Ch 4 Sept 11 4 Sept 16 Tests of Trade Models: Alternative Theories Ch 5 Sept 18 5 Sept 23 Tariffs Ch 6 Sept 25 3

University of Pittsburgh Fall 2013 Econ 0500 (CLS #10998) Tekin Kose 6 Sept 30 Oct 2 7 Oct 7 Oct 9 8 Oct 14 Oct 15 Oct 16 Non-tariff Barriers EXAM 1-Class Time Commercial Policy Preferential Trade Arrangements Fall Break (Monday classes meet Tuesday) International Trade and Economic Growth The Balance of Payments Ch 7 Ch 8 Ch 9 Ch 10 Ch11 9 Oct 21 The Foreign Exchange Market Ch 12 Oct 23 10 Oct 28 Open Economy Macroeconomics Ch 17 Oct 30 11 Nov 4 Nov 6 12 Nov 11 EXAM 2-Class Time Exchange Rates in the Short Run Ch 14 Exchange Rates in the Long Run Ch 15 Nov 13 13 Nov 18 International Investment, Banking and Risk Ch 18 Nov 20 14 Nov 25 Nov 27 15 Dec 2 Dec 4 Dec 6 Dec 11 International Monetary Systems Thanksgiving Recess Review Session EXAM 3-Class Time Project Submission Deadline Grades Announced on Courseweb Ch 13 Term Project Guidelines: In this project you will be using the tools and concepts of International Economics to analyze the data of a country. 4

University of Pittsburgh Fall 2013 Econ 0500 (CLS #10998) Tekin Kose Due on December 6, Friday - 5.00 pm via email. Late submissions are accepted with a discount on your grade until Dec 7, 11.59pm. Projects received between Dec 6, 5.01 pm-11.59 pm are graded out of 100 pts. Projects received between Dec 7, 12.00 pm-5.00 pm are graded out of 50 pts. Projects received between Dec 7, 5.01 pm-11.59 pm are graded out of 25 pts.. You can choose to work independently or as a team (with at most 2 members). Choose a country (not the U.S.) to study. Briefly describe your country in terms of geographical location, population, size of GDP, natural resources and per capita income. You can use World Bank to choose your country and get the initial data. http://data.worldbank.org/ Go to World Development Indicators data set of World Bank. http://data.worldbank.org/indicator Find Net barter terms of trade index (2000 = 100) for your country in the latest 10 available years. Graph the data and interpret it. Is this country having improvements in TOT? Indicate major exporting and importing sectors in your selected country. Discuss your finding by referring to comparative advantage theory. (You should cite valid data and/or academic article resources if you used any here). Does your country have any tariff and quota system? Briefly describe and explain. (You should cite valid resources if you used any here). Go to World Development Indicators data set of World Bank. Find Current Account Balance (BoP, current US$) data for your country in the latest 10 available years. Graph the data and interpret it. Is this country having surplus or deficit in current account? Find External debt stocks, total (DOD, current US$) data for your country in the latest 10 available years. Compare data of your country with another country. Is your country has more external debt than the other one you selected? Graph the data and interpret the sharp changes in it, if there is any. Find Foreign direct investment, net inflows (BoP, current US$) data for your country in the latest 10 available years. Compare data of your country with another country. Graph the data and interpret it. Is your country capable of attracting more FDI than the other country you selected? What type of exchange rate regime is your country following? Fixed? Floating? Managed Float? (You should cite valid resources if you used any here). Find data (daily, monthly) for your country s nominal exchange rate in terms of the U.S. dollar. Is your country s currency appreciating or depreciating? If you use daily data, data for 30 days would be enough. If you use monthly data, data for 2 years (24 months) would be fine. You are free to use any resource to gather the data as long as you have valid references. Before sending your project via email, check the followings: Your work should be in Microsoft Word format. This project, including references, should be at most 5000 words. (No other restrictions on font, paragraphing, etc.). You should name your document as follows: SurnameName1_(SurnameName2)_Econ0500_Fall2013_TermProject 5

University of Pittsburgh Fall 2013 Econ 0500 (CLS #10998) Tekin Kose FAQs and Answers: If you have any questions, please check the below list first. Then, feel free to contact me with your further questions. 1. I have a time conflict and cannot make it to your office hour, what should I do if I want to ask questions outside the classroom? You can always talk to me after the classes. It is also fine for me to meet with you in an arranged appointment. Please email me for the intended date and time to meet. You can also email me with your questions, and I will get back to you as soon as possible. For any kind of difficulty you face with in the course process, it is your responsibility to contact me and it is my responsibility to help you. 2. What will be the format of the tests and quizzes? There will be multiple-choice exams. Multiple choices, true/false questions, and problems may appear in pop-quizzes. The exams are in closed-book format. 3. Are there any make-up tests? For the exams, you will be given a make-up exam only if you notify me prior to the exam and present a certificate from doctor indicating that you were physically unable to attend the exam. In order to schedule a makeup exam, you must submit the proof of your excuse together with the Missed Exam Form available at the end of this document. There will be only one make up exam which will be a comprehensive one and held during the finals week. 4. Are the exams comprehensive? The exams are not comprehensive, but since economics is an integrated discipline, to do well in the exams you should not forget the basic materials you have learned before. As we move on in the course, you will notice that chapters build up on the knowledge of earlier chapters. This means you need to seek help early if you need it. You are welcome to come to my office for theoretical material help. 6. If I have to miss a class when there is a pop-quiz, is there any way I can have a make up for it? No. There are no make up for pop-quizzes. 7. Are there any pre-requisite of this course? Although this is an introductory course, so there are special pre-requisites. You should have knowledge of both Introductory Microeconomics and Introductory Macroeconomics. Moreover, since we will be using graphs heavily in our course, competence in basic algebra and geometry (graphing, linear equations and slopes of linear curves) would help. You may need to use first order differentiation which is taught in Introductory Calculus classes. 6