It is important to note that students must complete all tasks in this course to successfully complete this unit.

Submission method

The assignments and review essay must be submitted online through Turnitin to detect plagiarism and to determine whether the submitted work is your own.

The Online Tests must be completed online during the designated period of time.

It is important to note that any student who submits an assignment, essay or test that is not their own work will be automatically be given a mark of zero. Students will also face serious disciplinary action, which may include an automatic failure of ECON847 and the possible exclusion from Macquarie University. For further information on plagiarism and how to avoid it, please refer to the Academic Honesty Policy link in the Policies and Procedures section of this guide.

Extension

No extensions will be granted. Students who have not submitted any tasks by the deadline will be awarded a mark of 0 for the task, except for cases in which an application for Disruption to Studies is made and approved.

Technology used:

All assessments will be implemented on iLearn at the time and date specified in accordance with each assessment component.

Lecture materials (power of point slides and videos) and exercise questions will be posted on iLearn website. You need to check iLearn regularly.

Recommended Textbooks:

Salvatore, Dominick (2012), Introduction to International Economics, 3rd Ed, John Wiley and Sons.

Gerber, James (2010), International Economics, 5th Ed, Pearson Addison-Wesley.

Krugman, P, Obstfeld, M., and Melitz, M. (2015) International Economics: Theory & Policy, 9th Ed, Pearson.

Carbaugh, R. (2005), International Economics, 10th Ed, Thomson.

Husted, S. and Melvin, J. (2013), International Economics, 9th Ed, Pearson Addison Wesley.

Pugel, T. (2014), International Economics, 16th Ed, McGraw-Hill.

Sawyer, W. and Sprinkle, R. (2006), International Economics, Pearson.

Useful Websites:

Australian Department of Foreign Affairs and Trade, www.dfat.gov.au

Australian Bureau of Statistics, www.abs.gov.au

International Monetary Fund,  www.imf.org

Journal of International Economics, http://www.sciencedirect.com/science/journal/00221996.

Organisation for Economic Cooperation and Development, www.oecd.org

The Economist, www.economist.com

The United Nations Conference on Trade and Development (UNCTAD), www.unctad.org

World Trade Organisation, www.wto.org

World Bank, www.worldbank.org

LECTURE TOPICS

There are 10 topics to be covered over the 13-week semester. Some topics are longer than others, thus the numbering of topics below is not related to the number of lecture weeks. It is essential that students watch the video recorded for each topic on a weekly basis.

Topic 1: The Gains from Trade and Sources of Comparative Advantage

This topic discusses the classical theories and the gains of trade. More specifically, it covers the mercantilism and the way how people thought in the 16^th to the 18^th Century, Adam Smith’s idea of the Gains from Trade and his concept of absolute advantage and specialisation, David Ricardo’s idea of the Comparative Advantage, Heckscher-Ohlin’s model and its implications which include the Stolper Samuelson theorem and the factor price equalization theorem.

Topic 2: Intra-Industry Trade

This topic looks at other theories which explain some of the facts about trade. In particular, it includes the product life cycle model, the economies of scale, and the product differentiation as some possible candidates for the explanation of intra-industry trade.

Topic 3: Trade Restrictions (1): Tariffs

This topic discusses the most prominent instrument used by almost all governments in the world. It is Tariffs, a tax on importing goods and services into a country, usually collected by customs officials at the place of entry.

Topic 4: Trade Restrictions (2): Non-Tariff Barriers

A number of non-tariff measures to be discussed include import quota, voluntary export restraint, subsidy (more specifically export subsidy), anti-dumping duties, government regulations (aka implicit barriers), and other instruments.

Topic 5: Political Economy of Trade

The free-trade argument suggests that if each nation produces what it does best and permits trade, all nations will be beneficial. In reality, all countries have imposed some trade restrictions. This topic looks at numerous reasons for protection from both proponents’ and opponents’ points of view.

Topic 6: Trade and the Global Economy

This topic analyses the effects of using sanctions to enforce labor and environmental standards, and alternative methods which might be used to improve this standards without adversely affecting trade.

Topic 7: Trade Blocs

This topic describes various stages of economic integration, and analyses the effects of a customs union. It also looks at the EU and NAFTA as examples of trade blocs.

Topic 8: Trade and Development

This topic focuses on another branch of international trade, which is the relationship between trade and development, including the static and dynamic effects of trade on development, the deterioration in the terms of trade in developing countries, the immiserizing growth model, and the two industrialization policies to steer an economy away from producing and exporting primary product, toward manufactured products. 

Topic 9: International Factor Movements

In shifting our attention to international factor flows, we relax the assumption that we have used in much of the discussion up to this point, that is factors do not move internationally. In other words, factors of production can and do move between countries in amounts that are often large enough to have economic effects and to grab political attention. In this topic we will examine the economics of international migration by focusing on people who migrate for economic reasons, and then the effect of foreign direct investment on the host and the source country.

Topic 10: International Trade and Exchange Rate Movements          

Exchanges of goods and services are normally accompanied by exchanges of funds such as money and cheque. Hence importers and exporters do really care about the fluctuation in exchange rates and try to forecast the future exchange rate to plan their exports and imports as well as their production plan. In this final topic, we will look at alternative exchange rate arrangements, some arguments for and against the use of flexible exchange rates versus the fixed regimes, and alternative models to forecast or predict the future exchange rate.