ECON 3244: International Economic Policy

Giacomo Santangelo, Ph.D.

Fordham College at Rose Hill
Department of Economics
Spring 2020

Office: Dealy Hall E-515 Office Hours: TF 10AM - 11AM & by Appt.
Email: gsantangelo1@fordham.edu
Course Description
The aim of this class is to give you the tools necessary to read critically and understand discussions of past
and current events in the world economy. We will study selected basic models in international trade and
finance, discuss their practical relevance, and apply them to questions of current interest to policy-makers,
business leaders, and the general public, from both a micro- and macroeconomic point-of-view.

This course is broken into two parts: international trade and international finance. The first part of the
semester investigates reasons why nations trade, what they trade, and who gains from international trade.
We will also analyze countries’ motives for regulating international trade and the effects of such policies on
economic welfare. The second part introduces basic concepts and models in international finance necessary
to analyze such issues as trade imbalances, exchange rate fluctuations, monetary and fiscal policy from an
international perspective, and the choice of exchange rate regime.

Prerequisite
ECON 1100 and ECON 1200 (cannot be concurrent.) We will use micro- and macroeconomic tools and
models that you have learned in these courses, and it is important that you are familiar with and feel com-
fortable using and manipulting them.

Readings
The required textbook is:
Introduction to International Economics 3rd edition by Dominick Salvatore ISBN: 978-0-470-93489-0.
The textbook is a reference tool and a supplement to class meetings, which are the primary learning tool
in this course. Students are responsible for everything covered and announced in class. If you miss a class,
you must obtain information from your classmates. Class materials may sometimes differ from the text and
some of the topics in the textbook will be omitted. Students are highly encouraged to participate in class
discussions and ask questions – your involvement is important and appreciated! I encourage you to bring
colored pens/pencils to class for drawing figures

Macroeconomics: Big Things Have Small Beginnings 1st edition by Giacomo Santangelo ISBN: 978-1-516-
58222-8.
I will reference the book often, as a resource for the macro aspects of the material we will cover in-class.
(And because I wrote it.)

Even though we will cover technical material in class, the subject matter is extremely useful for under-
standing real world economic issues. I will try to develop real world applications in class whenever possible.
For your part, you should be inqusitive about the world: I expect you to read regularly some news sources to
stay abreast of current international economic news. We will devote part of one class each week to discussion
of items in the news, and those items will also be included in a small way on exams.
Attendance
Classroom attendance is required. Students who have more than six unexcused absences will receive a grade
of F, for the course. Also, please make sure to turn off all cell phones or other noise making devices during
class.
Grades
Two Midterm Exams 50%
Final Exam 40%
Class Participation 10%
Make-up Exams
No make-ups for the in-class exams will be given. The final is required, no final = no pass.

Email-Policy
I will do my best to repond to e-mails within 24 hours (48 hours during the weekend.)
 Tentative Course Outline
READING TOPICS
Ch 1 Introduction: Global Economy; Current International Economic Issues
Ch 2 Ricardian Model I: Absolute and Comparative Advantage; Opportu-
nity Cost; PPF, Autarkic Equilibrium
Ch 2 Ricardian Model II: Trade, Gains from Trade, Key Lessons
Ch 3 Standard Trade Model I: PPF; Community Indifference Curves
Ch 3 Standard Model II: Terms of Trade; Tariffs in an SOE and LOE
Ch 3,8 Standard Trade Model III: Immiserizing Growth
Ch 4 Heckscher-Ohlin Model: Autarky, Free Trade; Theorems; Empirical
Tests
Ch 4 Specific Factors Model; Trade and Welfare Analysis
Ch 4 Model of Intra-industry Trade: Economies of Scale, Product Variety
FIRST MIDTERM EXAM
Ch 5 Trade Policy I: Types of Tariffs; Partial Equilibrium Analysis of Tariffs
Ch 5 Trade Policy II: Partial Equilibrium Analysis of Tariffs; Optimal Tariffs
Ch 6 Trade Policy III: Non-Tariff Barriers (NTBs) and their usage - Quotas,
VERs, Export Subsidies; Dumping
Ch 6 Trade Policy IV: WTO, Main Features of US Trade Policy
Ch 6 Trade Policy V: Arguments for Protection
Ch 7 Economic Integration; PTAs and CUs; Regionalism vs. Multilateral-
ism
Ch 10 The Balance of Trade and Other Measures of International Transac-
tions; Current Account Deficits; Twin Deficits; Trade Imbalances
Ch 11 Foreign Exchange Market; Equilibrium Exchange Rate; Types of Ex-
change Rates
SECOND MIDTERM EXAM
Ch 12 Exchange Rate Determination I: Asset Model of Exchange Rates
Ch 12 Exchange Rate Determination II: Purchasing Power Parity Theory;
Law of One Price
Ch 12 Exchange Rate Determination III: Monetary Model of Exchange Rates
Ch 13 Automatic Adjustments with Flexible and Fixed Exchange Rates I
Ch 13 Automatic Adjustements with Flexible and Fixed Exchange Rates II
Ch 14 International Macroeconomic Policy I
Ch 14 International Macroeconomic Policy II
Ch 15 Flexible versus Fixed Exchange Rates

I am required by the University to make the following links available to you, for your benefit:
Disability Services:
http://www.fordham.edu/campus˙resources/student˙services/disability˙services˙/
Emotional Distress:
http://www.fordham.edu/downloads/download/392/faculty˙guide˙-˙responding˙to˙students˙in˙emotional˙distress
Reporting Sexual Misconduct:
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Health Services:
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Academic Integrity:
http://www.fordham.edu/info/21684/regulations/3693/the˙university˙code˙of˙conduct
Grading:
http://www.fordham.edu/academics/handbooks˙˙publicati/undergraduate˙facult/grades˙80569.asp
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http://www.fordham.edu/info/21682/deans˙of˙students˙and˙student˙life
Office of Title IX/Institutional Equity and Compliance:
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