ECON 324 - International Trade

[Fall 2018 Syllabus] | [Fall 2016 Syllabus]

International trade, simply defined, is the movement of goods across political borders. However, this simple concept is both remarkably complex economically, and is a vital ingredient for human civilization to flourish. The biggest difference between the last 250 (or so) years and the entire remainder of human history is the dramatic scale by which we have extended the division of labor. The overwhelming majority of our ancestors mired in what we would today consider abject poverty (for them it was the norm), rarely ever travelled more than a few miles from their birthplace, and to obtain just the basic goods needed for human subsistence - food, clothing, shelter, medicine - they had to make these themselves. Today, each of us consumes a wealth of goods which requires millions of tasks to be performed by people across the globe that we will never meet, and each of us will contribute only a sliver of tasks required to produce wealth to be enjoyed by people across the world we will never meet.

In this course, we will look at trade from this broad framework of extending the division of labor for human betterment. At the same time, we will get into the weeds and survey theories (and evidence) for understanding international trade flows and foreign trade policy: the purposes for its existence, the gains (and costs) created, and the division of those gains among different groups. As these subjects often intersect with current geopolitical events, especially during election cycles, we will attempt to explain these events using economic theory. Nearly all international trade theories are extensions of basic microeconomics, so this class assumes you have met the required prerequisite courses - ECON 205, 206, and 306.

Lesson Slides Practice Problems Homework
1. The Smithean View of Trade: Division of Labor
2. The Ricardian View of Trade: Comparative Advantage Comparative Advantage Practice (Answers) HW #1
3. The Standard (Neoclassical) Trade Model
4. The Hecksher-Ohlin (Factors) Trade Model
5. New Trade Theory HW #2