Microeconomics and
Trade for
International Commerce
Draft Revised: 18 November 2009
Kenneth A. Reinert
Phone: 703-993-8212
Email: kreinert@gmu.edu
Office: "Old" Arlington Building, Room 262
Office hours: W 7-8
Home page: http://mason.gmu.edu/~kreinert
Course Description
This course provides an
introduction
to microeconomics and international trade for the ICP
student. In the first part
of the course, our main objective is to understand the basic principles
of the market system underlying
local, national, and international economies. Here we will
assess both the desirable
properties and the limitations of the market system, as well as the
potential roles of government.
In the second part of the course, our main objective is to
understand the forces behind
international trade. Here we will assess the main causes of
international trade, their
effects, the analysis of trade policies, and the institutions of
international trade.
Required Books
There will be no books placed in the bookstore.
Krugman, P. and R. Wells, Microeconomics, Worth, 2009.
To be accessed via Aplia (see below).
Reinert, K.A.,
Windows on the World
Economy: An
Introduction to International Economics,
South-Western
Thomson, 2005 and Cambridge University Press, 2011.
Aplia
Midterm exam- 30 percent
Final exam- 30 percent
Problem Sets- 25 percent
Class participation- 15 percent
Course Outline and Readings
Week 1 (2 September): Introduction to Class
Reinert, Chapter 1,
"Windows on the World Economy."
The Economist, "The Oceans: A Sea
of Troubles," 3 January 2009.
Link to PowerPoint
Presentation.
Aplia graded problem set:
"Introduction to Using Aplia Problem Sets," deadline- 6 September,
11:00
PM
Krugman and Wells,
Chapter 1, "First Principles."
Krugman and Wells,
Chapter 2, "Economic Models: Tradeoffs and Trade,"
including Appendix.
The Economist, "Business and Water:
Running Dry," August 21, 2008.
Aplia graded problem sets:
"Chapter 1-
First Principles," deadline- 13 September, 11:00 PM
"Chapter 2-
Economic Models," deadline- 13 September, 11:00 PM
Week 3 (16 September): The Supply and Demand Model
Krugman and Wells,
Chapter 3, "Supply and Demand."
Krugman and Wells, Chapter
5, "The Market Strikes Back."
The Economist, "Excellence in a
Cup," 27 January 2007.
Aplia graded problem sets:
"Chapter 3-
Supply and Demand," deadline- 20 September, 11:00 PM
"Chapter 5- The Market Strikes Back," deadline- 20
September,
11:00 PM
Recommended: Lindblom, Chapter 3, "Market-System Coordination."
Week 4 (23 September): Elasticities
Krugman and Wells,
Chapter 6, "Elasticity."
The Economist, "Pricing Strategies:
The Price is Wrong," 23 May 2002.
Aplia graded
problem set:
"Chapter 6-
Elasticity," deadline- 27 September, 11:00 PM
Week 5 (30 September): Allocative
Efficiency
and Taxes
Krugman and Wells, Chapter 4, "Consumer and Producer
Surplus."
Krugman and Wells, Chapter 7, "Taxes."
Recommended: Lindblom,
Chapter 12, "Too Little, Too Late."
Aplia
graded
problem set:
"Chapter 4-
Consumer and Producer Surplus," deadline- 4 October, 11:00 PM
"Chapter 7- Taxes," deadline- 4 October, 11:00 PM
Week 6 (7 October): The Theory of the Firm
Krugman and Wells,
Chapter 9, "Making Decisions."
Krugman and Wells, Chapter
12, "Behind the Supply Curve."
Aplia
graded problem sets:
"Chapter 9-
Making Decisions," deadline- 11 October, 11:00 PM
"Chapter 12- Behind the Supply Curve," deadline- 11
October,
11:00 PM
Week 7 (14 October): The Theory
of
the Firm
Continued
Krugman and Wells,
Chapter 13, "Perfect Competition and the Supply Curve."
Aplia
graded problem sets:
Week 8 (21 October): Midterm Examination
See study guide link at top of page.
Week 9 (28 October): Market Failure (Monopoly, Externalities, Public Goods)
Krugman and Wells,
Chapter 14, "Monopoly."
Krugman and Wells, Chapter
17, "Externalities."
Krugman and Wells, Chapter
18, "Public Goods and Common Resources."
The Economist,
"Climate Change: Welcome to Kyoto-Land," 9 October 2004,
57-59.
Kaul, Grunberg, and Stern,
"Defining Global Public Goods," in Global Public
Goods, Oxford University
Press, Oxford,
1999, 2-19. On electronic reserve.
Recommended: Lindblom,
Chapter
5, "Enterprise and Corporation."
Aplia
graded problem sets:
"Chapter 14- Monopoly," deadline- 1 November, 11:00 PM
Week 10 (4 November): International Trade
Reinert, Chapter 2, "Absolute Advantage."
Reinert, Chapter 3, "Comparative Advantage."
Reinert, Chapter 4, "Intra-Industry Trade." Recommended: Goldin and
Reinert, Chapter 3, "International Trade."
Week 11 (11
November): No Class
Week 12 (18 November): Trade Politics and Policy
Reinert, Chapter 5, "The Politics of Trade."
Reinert, Chapter 6, "Trade
Policy Analysis."
Recommended:
K.A. Reinert and J.F. Francois, "Partial
Equilibrium Modeling,"
Princeton
Encycopedia of the World Economy, 2009.
Week 13 (25 November):
Thanksgiving Break
Week 14 (2 December): The WTO and Regional Trade Agreements
Reinert, Chapter 7, "The World Trade Organization."
Reinert, Chapter 8, "Regional Trade Agreements."
The Economist, "Regional Trade
Agreements: A Second-Best Choice,"
4 September 2008.
The Doha Ministerial Declaration.
Recommended:
Hoekman
and Kostecki, Chapter 1; Reinert, K.A. "The European
Union, the Doha Round, and Asia,"
Asia Europe Journal, 5:3,
2007, available
through e-jounals.
Reinert, Chapter 9, "Foreign Market Entry and
International Production."
Reinert, Chapter 10,
"Foreign Direct Investment and Intra-Firm Trade."
Recommended: I. Goldin and
K.A. Reinert,
"Global
Capital Flows and Development: A Survey," Journal
of International Trade
and Economic Development, 14:4, 2005.
See study guide link at
top
of page.
Other Useful Books
Goldin, I. and K.A.
Reinert, Globalization for
Development, World Bank,
2007.
Hill, C.W.L., International Business, McGraw-Hill, 2007.
Hoekman, B.M. and
M.M.
Kostecki, The Political Economy of the World Trading
System, Oxford
University
Press, Oxford, 2001.
Kurlansky, M., Cod, Penguin, 1998. A scarce
(common pool) resource in
historical perspective.
Levinson, M., The Box, Princeton University
Press, 2006. A history of
container shipping and its impacts on the world
trading system.
Lindblom, C.E., The
Market
System, Yale University Press, 2001.
Some Policies
Exams are not "open book" or "open notes."
There is no "extra work" that can be done for "extra credit."
Students are responsible for obtaining notes from other class members if they miss a class.
The GMU honor code will be
enforced. To be more specific: If I can show that a student
cheated
on an exam, that student will fail the course.
It is my
policy not to discriminate among students based on race, ethnicity,
religious faith,
national origin, gender, sexual
orientation, or
physical ability.