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Goals
The course will enable students to use the microeconomic tools to
analyze policy issues in international trade, and to marshal arguments
in support or opposition of proposed policy measures affecting trade.
Students will acquire the ability to argue and measure the basic effects
of trade policy decisions on production, employment, prices, consumer
welfare, and the standard of living. Students will also be able to
prepare policy briefs on the impact of trade, domestic competition,
industrial policy and regulatory decisions on the operation of national
and international markets, and ultimately on innovation, growth and
consumer welfare.
The course
is based on the assumption that students have had a basic course in
economics at the college level; accordingly, this course will provide a
concentrated review of the core concepts and demonstrate how they are
applied in real world situations.
Topics
Covered
The course will cover fundamental concepts of microeconomics
including the following, emphasizing their practical applications:
demand and supply curves, price and income elasticities, fixed and
variable costs, short‑term and long‑term equilibrium
conditions, competitive conditions under different market structures,
measures of consumer welfare, static and dynamic economic efficiency,
determinants of labor productivity, factors affecting demand and supply
of labor, the incentives for innovation and conditions for dynamic
growth.
We will rely
on case studies of policy actions in trade and related policy areas to
understand how microeconomic concepts arise within a real‑life
context; material includes documents prepared in support and opposition
of the various positions presented by interested parties.
Key Books
and Articles
Schotter,
Andrew, Microeconomics (Harper
Collins: 1994).
Dixit, Avinash
& Barry Nalebuff, Thinking
Strategically (Norton: 1991).
Case
Material
Materials prepared to examine (a) the economic effects of the
Uruguay Round, (b) a competition policy case involving both potential
trade and anti‑trust measures, and issue drawn from the telecom
negotiation in the WTO, (d) a countervailing duty case, and (d) a
proposed safeguard action.
Criteria
for Evaluating Teaching and Student Performance
Students should be able to describe the key
microeconomic concepts in their own words and be able to apply them to
the analysis of hypothetical policy issues involving trade actions and
trade-related microeconomic domestic policy actions. Students should
be able to analyze the effects on prices, wages, profits, jobs,
productivity and consumer welfare.
Students will evaluate the instructor's
performance at the end of the session on a number of criteria including
clarity, availability and grasp of the material.
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