BASICS FOR WORLD ECONOMY

The scope of the course is outlined below. The aim is to introduce undergraduate students to basic international trade theory, starting from the classical foundations of comparative advantage developed by David Ricardo proceeding to Ricado's classical model that is extended to having money and prices in Part1. Part2 is extensive and modifies the latter classical model structure into the modern versions of the neoclassical trade model in order to highlight the important trade pattern implications of (i) consumption and production sectors of countries; (ii) changes in terms of trade and in shifts in national offer curves, and (iii) factor endowments. Throughout, rigorous attention is placed in analysis of gains of trade of all models and model alterations. Aimed at being non-mathematical, the course strives to rigorously use graphical methods to illustrate points. At the course's end, the course will provide analyses of selected trade policy instruments and illuminate the impact on trade patterns of such policies and instruments.

This course is designed to familiarize economics students at the undergraduate level with international trade theory – the basic element needed by any economist who wants to understand international trade markets and how they work. The course begins with Ricardo’s classical model (barter and monetized economies) in order to provide an understanding comparative advantage and why trade flows unfold the way they do. In particular, we use Ricardo’s barter and monetized models in order to show how relative changes in technology, relative wages and relative exchange rates impact comparative advantage and drive trade flows. The course then provides a short review of basic microeconomic theory in preparation of delving into the neoclassical trade model and its extensions. We then extend Ricardo’s classical model by adding full production and consumption sectors and examine the Neoclassical trade model and its extension’s – the Heckscher-Ohlin and the Heckscher-Ohlin-Samuelson models. Finally, if time permits, we will look at the instruments of Trade Policy (Barriers to Trade) and how such trade policies influence trade.

There are no written comprehensive exams. Instead, there will be written take home exams (homework assignments) each worth 100 points. Also, there will be a number of un-announced pop-quizzes each of which is also worth 100 points. Students will be ranked by the total number of points earned. Attendance is mandatory and Keimyung University rules on attendance and grades will be followed. Any student who is absent 30% or more of the classes' total hours will be given an F automatically (a Keimyung University rule). All take home exams or homework assignment must be submitted in person (NO EMAIL SUBMISSIONS). All take homework assignments/take home exams must be done on time: late submittals will be charged penalty points. I will accept late assignments that are reasonably late; I will not accept assignments that are very late. All graphics must be done by hand (and not in computer-generated routines).

There will be no comprehensive midterm exam and no comprehensive final exam. There will be from 8 to 12 "take home exams" (also known as homework assignments) and pop-quizzes combined. Each take home exam and each pop-quiz will be worth about 10 percent of the grade. In the above data on evaluation, I will use absentee rates as a marginal tool to assign final grades. For grading, students will be ranked by the total number of point earned on the take home exams and pop-quizzes. When two or more students are "tied" in the number of quiz and homework points earned when vying for a limited number of A's and/or B's, the relative number of absences will be used as one of the ways of "breaking the tie" in ranking of such students. As a result, I have placed a 5% weight on absences above. Keimyung University rules on absentee rates and grades apply in my class. I have a strict rule following Keimyung University rules: students who are absent for 30% or more of the total class hours each semester will be assigned an augomatic F, regardless of their performance on the take home exams and pop-quizzes.

Elementary economics (introductory course); basic algebra and mathematics. Students must have enough capability in English to understand the instructor and to read homework assignments (take home exams) and pop-quizzes.

This course prepares students with a basic knowledge of international trade theory. The course will demonstrate an understanding of comparative advantage and why economic agents trade, and how factor endowments, technology, wage rates, labor policies, and exchange rate policies inflinfluence comparative advantage and trade flows.The course will help students write course papers, theses, and dissertations on trade topics. The course will be indispensable for taking the Department's qualifying exam on trade.