The International Economics
Study Center


 

GWU Econ 6280/2180
Survey of International Economics
Tentative Course Syllabus

Summer 2017 in Shanghai (Last Update Jan 19)

This course is a survey international trade and international finance theory and policy. It will consist of half the material from an international finance course (Econ 6284/2182) and half the material from an international trade class (Econ 6283/2181). Students should be comfortable with graphical techniques and the basics of Micro and Macro economics.

LEARNING OUTCOMES:

  1. to describe the main international macroeconomic variables
  2. to understand the pros and cons of large trade deficits and surpluses.
  3. to be able to judge when a country's trade imbalace is problematic, beneficial or benign.
  4. to describe the interest rate and purchasing power parity theories of exchange rate determination.
  5. to understand how a fixed exchange rate is implemented.
  6. to understand the pros and cons of fixed and floating exchange rates
  7. to be able to explain the distinction between comparative and absolute advantage.
  8. to understand the ethical constraints necessary for mutually advantageous trade
  9. to understand the multiple motivations for international trade
  10. to understand the price and welfare effects of trade
  11. to understand the effects of tariffs and export subsidies
  12. to be able to give several examples of the theory of the second best.
  13. to be able to provide arguments both supporting and opposing free trade.

 

TIME REQs: Over 6 weeks, students will watch 8 - 100 minute lecture videos during the first four weeks prior to arrival in China and will attend 8 180 minute lectures during the 2-week period in China for total direct instruction of 2240 minutes. Required reading for the class meetings, practice problems, paper preparation and travel and guest lecture attendance etc., are expected to amount to 80 hours. Over the course of the semester, students will spend 37.5 hours in instructional time and 80 hours preparing for class.

ACADEMIC INTEGRITY: You are bound by the GW Code of Academic Integrity which states: “Academic dishonesty is defined as cheating of any kind, including misrepresenting one's own work, taking credit for the work of others without crediting them and without appropriate authorization, and the fabrication of information.” For the remainder of the code, see: https://studentconduct.gwu.edu/code-academic-integrity

SUPPORT FOR STUDENTS OUTSIDE THE CLASSROOM

DISABILITY SUPPORT SERVICES (DSS): Any student who may need an accommodation based on the potential impact of a disability should contact the Disability Support Services office at 202-994-8250 in the Marvin Center, Suite 242, to establish eligibility and to coordinate reasonable accommodations. For additional information please refer to: https://disabilitysupport.gwu.edu/

UNIVERSITY COUNSELING CENTER (UCC): 202-994-5300, The University Counseling Center (UCC) offers 24/7 assistance and referral to address students' personal, social, career, and study skills problems. Services for students include: crisis and emergency mental health consultations and confidential assessment, counseling services (individual and small group), and referrals http://gwired.gwu.edu/counsel/CounselingServices/AcademicSupportServices

Professor: Steve Suranovic

Online Course Component:
        Complete 6 Learning Modules on Blackboard         before arriving in China

China Component - Time & Location:
        American Study Center (ASC), Fudan University

        July 2 - July 15, 2017

        Various times, See Schedule below

Office Hours: by appt.
E-mail: smsuran@gwu.edu

Evaluation
Class Participation
10%
6 online quizzes
5% each; Only top 4 scores count
2 Short Papers
15% each
1 Final Exam
40%

 

Deadlines and Exams
Paper #1 - 15%
Due July 31: 11pm EDT
  Paper #2 - 15%
Due July 31: 11pm EDT
Final Exam
July 14: 1:30-4:30pm

 

Sunday

July 2

 

Arrival and Check-in at Crowne Plaza Fudan

Welcome Dinner at 7pm near hotel

Monday

July 3

9am-12

ASC

National Income Accounts, the Balance of Payments and the Evaluation of Trade Imbalances

 
In the first session we explore the topics and issues of international finance. We will review highlights from history, describe notable current laws and institutions, both domestic and international. This session tries to dispel the popular notion that trade deficits are "bad" and trade surpluses are "good". The material highlights the intertemporal borrowing and lending associated with trade imbalances and notes situations in which each of these could be appropriate (or inappropriate) for both individuals and for nations. Key factors needed to determine the seriousness of a trade imbalance are discussed and a case study for the US is presented.

Readings:

 

Supplementary Readings:

US Annual GDP Data 1929-present
an excel spreadsheet with GDP data for the US during the past 80 years.

The Latest International Data
The Economist publishes the more recent economic data for a wide range of countries every week. This is a good place for a quick overview of the current economic state of the world.
Check especially, Output, Prices and Jobs and Trade, Exchange Rates etc. in the second column.

US National Income and Product Accounts (NIPA)
the most recent US data is available here from the US Bureau of Economic Analysis. To access the data click on the Interactive Tables link or click here for direct access.

US International Accounts Data
the most recent US data from the US balance of payments accounts including the US international investment position available here from the US Bureau of Economic Analysis.
To access the data click on the Interactive Tables link.

Japan Twin Deficit Identity 1982-2009

International Investment Position Data

Imports and Economic Growth
an Economic Tends report from the Federal Reserve Bank of Cleveland. (Feb 2010)

Monday

July 3

1:30-6:30

 

Tour of Old and New Shanghai:

Yuyuan Garden, The Bund,

Pudong, Nanjing Lu

Tuesday

July 4

9am-12pm

ASC

Exchange Rates, Interest Rates and Interest Rate Parity
This session highlights the linkage between the exchange rate, and interest rates through the interest rate parity condition. It is shown how changes in economic variables can affect differential rates of returns which in turn can affect the value of the exchange rate.

Readings:

Tuesday

July 4

1 - 4 pm

 

 

Shopping Tour of Shanghai: Fake and Real

 

Wednesday

July 5

9am-12

ASC

More Interest Rate Parity and Purchasing Power Parity and Fixed Exchange Rates
This session continues with interest rate parity and then presents the theory of purchasing power parity. The logic of the theory as an explanation for exchange rate movements is provided. More importantly, the supplemental readings help teach the way PPP exchange rates are used to make international comparisons of economic data. The session also introduces fixed exchange rates and proceduires for maintaining them.

Readings:

 

Supplementary Readings:

The Economist's Big Mac Index
This page displays a great interactive Table that provides the most recent info about Big Mac prices around the world.

Wikipedia GDP Data
GDP (nominal)
GDP (PPP)
GDP (nominal) per capita
GDP (PPP) per capita

Comparative Price Levels for OECD countries
these numbers are the same as the real exchange rates.

Weds

July 5

2pm

 

Visiting Lecturer

GW Alumni Ted Hornbein on the Business Environment in China

Presentation and Q&A

(Unconfirmed)

Thurs

July 6

9am-12

Fixed vs. Floating Exchange Rates

This session presents a brief overview of the differences between fixed and floating exchange rates.

 

Readings:

Chapter 8 - Policy Effects with Floating Exchange Rates
Read Section 8.2 on Indirect and Direct FOREX Interventions.

Chapter 9 - Fixed Exchange Rates
Read Sections 9.3 to 9.6.

Chapter 11 - Fixed vs. Floating Exchange Rates
Read All Sections.

 

Supplementary Readings:

Fixed or Flexible? Getting the Exchange Rate Right in the 1990s
A 1998 article by Francesco Caramazza and Jahangir Aziz from the IMF describing the differences between fixed and floating exchange rates.

Thurs

July 6

Afternoon

 

Free Time

Thurs

July 6

Evening

 

Karaoke Night

Friday

July 7

Free Day

 

 

 

 

 

Sat

July 8

 

Travel to Hangzhou (7am)

Visit West Lake and Lingyin Temple

Sun

Jul 9

Free Day

 

Monday

July 10

9am-12

ASC

International Economic Issues: Competitive Markets, Comparative Advantage and Income Redistributions
In the first session we explore the topics and issues of international economics, both trade and finance. We will review highlights from history, describe notable current trade laws, and introduce the WTO. This session we will also discuss the pure exhange model, the Ricardian theory of comparative advantage, the gains from trade, and the workings of a competitive international market.

Readings:

 

Mon

July 10

Afternoon

 

Visiting Lecturer

TBD

Presentation and Q&A

(Unconfirmed)

Tuesday

July 11

9am-12

Travel to Jiangwen Campus; 8:00 am departure

Class at the New City Campus

Profit, Competitive Markets, Income Redistributions and Immobile Factors

This session will begin with an explanation of the most basic gains from trade and follow with a discussion reasons why trade can produce winners and losers.

Readings:

Tuesday

July 11

6:30pm

GW Alumni Event

Networking Opportunity

(Unconfirmed)

Wednesday

July 12

9am-12

ASC

The Effects of Trade Policies: Tariffs, Subsidies and Retaliation

This session will demonstrate the price and welfare effects of a tariff, and export subsidies in large and small country cases. We will also consider simple examples of trade wars and use insights from this to help understand the motivations for the WTO.

Readings:

Weds

July 12

2-4pm

Free Time

Thurs

July 13

9am-12

ASC

Market Imperfections and Distortions, Evaluating the Controversy

This session will discuss market imperfections and distortions such as unemployment, infant industries and environmental concerns. This will raise some questions concerning the appropriateness of free trade. However, we will also consider counterarguments and conclude with the modern argument supporting free trade.

Readings:

Supplementary Readings:

Economist Views on Free Trade
A survey of top economists's views on free trade in general and free trade under NAFTA.

The Fruits of Free Trade
A report about the advantages of free trade put out by the Dallas Federal Reserve Bank. A Great supplementary reading!!

Domestic Support Policies
A briefing paper by the Economic Research Service at the US Dept. of Agriculture

Trade and the Environment in the WTO
This press brief provides an overview of the work by the WTO Committee on Trade and the Environment

Thurs

July 13

Afternoon

 

 

Free Afternoon and Evening

Friday

July 14

Morning

 

Free Morning

Friday

July 14

1:30-4:30

ASC

 

Final Exam

Friday

July 14

6:30-9

 

Departure Dinner

Location TBD

 

Saturday

July 15

before noon

 

 

Checkout and Departure from Crowne Plaza Fudan

Monday

July 31

by 11PM EDT

 

Papers 1 and 2 Due