| SES # | TOPICS | READINGS |
|---|---|---|
| I. International trade | ||
| L1-L3 | International trade and gains from trade; The Ricardian model | KO, chapter 2. Handout 1.1 (PDF) Handout 1.2 (PDF) |
| L4-L6 | The specific factors model and the standard trade model | KO, chapters 3 and 5. |
| L7 | Globalization and inequality | Handout 2 (PDF) Kremer, Michael, and Eric Maskin. "Globalization and Inequality." October 2006. |
| L8 | The transfer problem | Keynes, J. M. "The German Transfer Problem." Economic Journal 39 (1929): 1-7. Ohlin, B. "The German Transfer Problem: A Discussion." Economic Journal 39 (1929): 172-182. |
| L9-L10 | Trade policy - Tariffs | KO, chapters 8 and 9. Handout 3 (PDF) |
| L11-L12 | A case study of trade policy | McMillan, Margaret S., Dani Rodrik, and Karen H. Welch. "When Economic Reform Goes Wrong: Cashews in Mozambique." National Bureau of Economic Research Working Paper No. 9117, August 2002. |
| L13 | Multinationals - Guest lecture by Pol Antras | |
| Midterm exam | ||
| II. Open economy macroeconomics | ||
| A. Inter-temporal trade and financial markets | ||
| L14-L15 | Inter-temporal trade and the current account | KO, chapter 12. Handout 4 (PDF)
|
| L16 | Current account adjustment and real exchange rates (with application to the U.S. current account deficit) | Handout 5 (PDF) "A Survey of the World Economy." The Economist (September 22, 2005). Obstfeld, Maurice, and Kenneth Rogoff. "The Unsustainable US Current Account Position Revisited." National Bureau of Economic Research Working Paper No. 10869, November 2004. Blanchard, Olivier, Francesco Giavazzi, and Filipa Sa. "The U.S. Current Account and the Dollar." MIT Department of Economics Working Paper No. 05-02, January 26, 2005. |
| L17-L18 | The Foreign exchange market and currency speculation | KO, chapter 13. Burnside, Craig, Martin Eichenbaum, Isaac Kleshchelski, and Sergio Rebelo. "The Returns to Currency Speculation." mimeograph, Northwestern University, October 2006. |
| B. Short-run adjustment and crises | ||
| L19-L20 | Money and exchange rates, PPP, and the real exchange rate | KO, chapters 14 and 15. Handout 6 (PDF) Goldberg, Pinelopi, and Frank Verboven. "Market Integration and Convergence to the Law of One Price: Evidence from the European Car Market." Centre for Economic Policy Research Discussion Paper No. 2926, August 2001. |
| L21-L22 | The Mundell-Fleming model and exchange rate regimes |
Chapter 19: "The Goods Market in an Open Economy." Chapter 20: "Output, the Interest Rate, and the Exchange Rate." Chapter 21: "Exchange Rate Regimes." |
| L23-L25 | Financial crises and currency crises | KO, chapters 17 and 22. Handout 6 (PDF) Obstfeld, Maurice. "The Logic of Currency Crises." 1994. DeLong, J. Bradford. "The International Financial Crises of the 1990s: Analytics." 2001. (Grasping Reality with Both Hands: Brad DeLong's Semi-Daily Journal) Calvo, Guillermo. "Explaining Sudden Stops, Growth Collapse and BOP Crises: The Case of Distortionary Output Taxes." National Bureau of Economic Research Working Paper No. 9864, July 2003. |
| L26 | Course summary | |
| Final exam | ||
Table of Contents
Study Materials
Readings
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Textbook
The textbook is:
[KO] Krugman, Paul, and Maurice Obstfeld. International Economics: Theory and Policy. Boston, MA: Addison Wesley, 2008. ISBN: 9781408208076.
Some of the other listed references will be covered in class; some are for your own reading.
Readings by Session