International trade

Lectures: 2 sessions / week, 1.5 hours / session

Recitations: 1 session / week, 1 hour / session

14.01SC Principles of Microeconomics and 14.02 Principles of Macroeconomics are prerequisites for this course.

This course will analyze the causes and consequences of international trade and investment. We will investigate why nations trade, what they trade, and who gains (or not) from this trade. We will then analyze the motives for countries or organizations to restrict or regulate international trade and study the effects of such policies on economic welfare. Topics covered will include the effects of trade on economic growth and wage inequality, multinationals and foreign direct investment, international trade agreements and current trade policy disputes. We will also spend some time discussing aspects of the current debate on "globalization" such as the use of international labor standards, interactions between trade and environmental concerns, and the role of non-government organizations (NGOs). Although the course will emphasize the understanding of past and current events in the world economy, we will heavily rely on formal economic modeling to help us understand these events.

Krugman, Paul, Maurice Obstfeld, and Marc Melitz. International Economics: Theory and Policy. 9th ed. Addison-Wesley, 2011. ISBN: 9780132146654.

There will be one in-class midterm exam (35% of the course grade), and one final exam (50% of the course grade). The exams will cover all the lecture material, all of the assigned textbook reading, and some of the additional readings. The specific readings that will be required for each exam will be announced well ahead of each exam date. There will be no make-up exams. All exams will be closed-book: You may not use notes, electronic devices, books, or communicate to other classmates. Six problem sets will be distributed during the semester. The problem sets will be collected and evaluated, and answers will be subsequently posted on the class website. You are encouraged to discuss these problems with your classmates; however, you must write up your own answers. Problem set evaluation will account for the remaining 15% of your course grade.

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