California State University, Los Angeles
Center for Newly Independent States Studies (CNISS)
offers a Distance Learning course
ECONOMICS OF INTERNATIONAL TRADE
By Dr. Ashish Vaidya
1 9 9 7



Course ID: EIT
COURSE DESCRIPTION
This is a course in the Economics of International Trade. In this course we will be concerned with what determines trade between countries, how countries benefit foam trade, and what shapes trade policy in our changing global economy. It is designed for those interested in understanding international trade patterns and formulating trade policy. It is also appropriate for those wishing to understand the domestic and global effects of changes in real economic variables on commodity trade, and the welfare impact of various trade instruments, such as tariffs, quotas, and other protective measures.
OBJECTIVE OF COURSE
International economic issues have taken center stage in the news in recent years. Issues such as NAFTA (North American Free Trade Agreement), the recent GATT (General Agreement on Tariffs and Trade) negotiations, episodes of trade conflict, and the growth of MNCs (Multinational Corporations), have dominated the news. We will explore some of these issues during this course. In particular we study the reason trade takes place, the implications for commodity and factor prices of changes in real variables, the benefits and patterns of trade, and the effects of trade restrictions on the welfare of the economy.
INSTRUCTOR
The instructor for this course is Dr. Ashish Vaidya. Dr. Vaidya is an Associate Professor in the Department of Economics and Statistics at California State University, Los Angeles. He joined the Department in 1991 after completing his Ph.D. in Economics from the University of California at Davis. His fields of specialization are International Trade and Development Economics. He has taught courses in Microeconomics, Business Statistics, International Trade, and Economic Development. He has published research articles in the areas of Strategic Trade Policy, Optimal Trade Policy, and Agricultural Policy, in leading journals, such as Journal of Economic Integration, International Trade Journal, Applied Economics Letters, and Economia Internazionale. His current area of research is in designing trade liberalization policies for developing countries.
COURSE ORGANIZATION
Major topics are INTERNATIONAL TRADE THEORY and TRADE POLICY
INTERNATIONAL TRADE THEORY

WEEK ONE

Chapter 1: The Ricardian Model

  • (a) Absolute Advantage vs Comparative Advantage
  • (b) Gains from Trade
  • (c) Misconceptions in International Trade
  • (d) Empirical Test of the Model and Criticisms
  • WEEKS TWO AND THREE

    Chapter 2: The HeckscherOhlin Model

  • (a) Assumptions of the Model
  • (b) Gains from Trade
  • (c) FactorPrice Equalization
  • (d) StolperSamuelson Theorem
  • (e) Rybczynski Result
  • (f) Trade with Demand & Supply Curves
  • (g) Empirical Evidence on the HO Model
  • Assignment 1 will be given at the end of week 2 and will be due by the end of week 3. The problems will be based on the 2 models learnt in Chapters 1 and 2.

    Chapter 3: Economic Growth and Terms of Trade

  • (a) ImportBiased vs ExportBiased Growth
  • (b) Immiserizing Growth
  • WEEK FOUR

    Chapter 4: The Specific Factors Model

    There will be a midterm examination at the end of week four. The midterm will cover material from Chapters 1 through 4.

    WEEK FIVE

    Chapter 5: Imperfect Competition and International Trade

    TRADE POLICY

    WEEKS SIX AND SEVEN

    Chapter 6: The Instruments of Trade Policy

  • (a) Tariffs
  • (b) Import Quotas
  • (c) VERs
  • Assignment 2 will be given at the end of week 5 and will be due at the end of week 6. Midterm 2 will be given at the end of week 7. The second midterm will cover material from Chapters 5 and 6

    WEEK EIGHT

    Chapter 7: Trade Policy in the Presence of Imperfect Competition
  • (a) Tariffs vs Quotas
  • (b) Strategic Trade Policy
  • WEEK NINE

    Chapter 8: Political Economy of Trade Policy

  • (a) The Rise in Protectionism
  • (b) Arguments used to Justify Protectionism
  • (c) Costs of Protection
  • WEEK TEN

    Chapter 9: Economic Integration

  • (a) Trade Creation vs Trade Diversion
  • (b) Regional Trading Arrangements
  • There will be a final at the end of week 10. The final will cover materials from Chapters 6 through 9.
    GRADING
    There will be 2 midterm examinations in addition to the final. Your grade in the class will be a weighted average of the grades received on assignments, midterms, and the final. The weights are:
  • Assignments (10%)
  • Midterm 1 (25% of grade)
  • Midterm 2 (25% of grade)
  • Final (40% of grade)
  • COURSE ADMINISTRATION
    The course involves six major activities: registration, an initial class meeting, course study segments, obtaining and responding to examination questions, an interactive questions/answers, and obtaining a grade and a certificate of completion. Details on each will be supplied with the registration verification.

    Registration

    Announcements and registration forms can be obtained from participating universities/organizations. Completed registration forms with payment will be returned to the designated course coordinator at the participating university/organization. Confirmation of registration with appropriate course material will then be given to the student.

    Initial Class Meeting

    Course participants will meet as a group with the course coordinator at each participating university/organization. During the meeting, the Internet material will be distributed and demonstrated; and selfstudy, testing, and grading approaches will be explained.

    SelfStudy Sessions

    Each of the chapters will be studied and any questions will be sent to the course instructor.

    Examination Questions

    A course coordinator will request examination questions via e-mail. Students will answer questions and return them for grading to the instructor. The student grades and any instructor comments will be returned to the course coordinator or to a student.

    Question/Answer Methodology

    Students are encouraged to submit comments and questions to the course instructor.

    Grades and Certificates of Completion

    Course grades and certificates of completion will be forwarded to the course coordinator who will distribute them to the students.

    To apply, please send your e-mail to:

    cniss@calstatela.edu


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