Economics 464: International Trade and Finance

This site provides resources for students in Economics 464 at the University of Wisconsin, Madison for Spring 2005 Semester

Instructor
Professor Menzie Chinn
Office Hours: M 1:30-3:30
Office: 7418 Social Sciences Bldg.
Phone: (608) 262-7397
email: mchinn@lafollette.wisc.edu
Home Page

Teaching Assistant
Hitoshi Sato
Office Hours: Th 1-2, 4-5
Office: 6443 Social Sciences Bldg.
Phone: (608) 262-4894
email: hitoshisato@wisc.edu

Course Syllabus

This course surveys international economics, with special emphasis on the open economy macroeconomics. Specific reference will be made to international monetary policy and international financial market architecture. Topics include the structure of international financial markets; the role of central banks; exchange-rate systems; the determination of balance of payments and exchange rates; macroeconomics of open economies; the International Monetary Fund; and financial crises.

The textbook is Caves, Frankel and Jones, World Trade and Payments 9th Edition, available at the University Bookstore. Additional assigned readings will be available in a readings packet, and on the Web (via links on this website).

Important Dates

• Review Section for Midterm 1, 5PM Sunday, 3/6, in 6224 Social Sciences.
• Midterm 1, Monday, 3/7. NOTE: MIDTERM TAKES PLACE IN 6210 SOCIAL SCIENCES instead of regular classroom
• Midterm 2, Wednesday, 4/13 NOTE: MIDTERM TAKES PLACE IN 6210 SOCIAL SCIENCES instead of regular classroom
• Review Section for Final Exam, 5PM Saturday, 3/7, in 2327 Sterling Hall.
• Final, Monday, 5/9 5:05PM SOCIAL SCIENCES 5208

Course Materials and Sources of Economic Information

Downloadable Course Materials

• Handout for Lecture of 19 January
• News Release: U.S. International Trade in Goods and Services
• News Release: U.S. International Transactions
• News Release: U.S. International Investment Position at Yearend, 2003
• Problem Set #1 (revised) due February 14, REVISED 7/2/05.
• Problem Set #1 Answer Key
• Problem Set #2 due 2/28/05
• Chapter 8, Economic Report of the President, 2005 Entire report at Economic Report of the President, 2005 (4MB)
• Practice Midterm #1
• Problem Set #2 Answer Key
• Midterm #1 Answer Key
• Midterm #1 Statistics and Grade Distribution
• Notes on the Elasticity Approach (Re-Corrected 3/28/05)
• Problem Set #3
• Link to Data for PS#3 Question 1 for All of 2004
• Figure on page 1 of electronic version of Problem Set #3 (from 2004 ERP)
• Problem Set #3 Answers revised 4/11/2005
• Practice Midterm #2
• Midterm #2 Answer Key
• Midterm #2 Statistics and Grade Distribution
• Problem Set #4 due 4/27/2005
• Handout of April 25, 2005, part 1
• "The Big Mac Index," Economist (May 27, 2004)
• Problem Set #4 Answers due 4/27/2005
• Problem Set #5 (revised) (revised 4/29) due 5/4/2005
• "Big Mac Index: Food for Thought," Economist, May 27, 2004. additional material for revised PS#5
• Exchange Rate table for PS#5
• Interest Rate table for PS#5
• Inflation table for PS#5
• Problem Set #5 (revised) Answers
• Slides to accompany lecture on Global Rebalancing (5/4)
• Notes on Portfolio Balance Model (rev'd 5/4)

News Reports and Additional Readings

• Floyd Norris, "U.S. Tech Exports Slide, but Trash Sales Are Up," NYT Jan 14
• Keith Bradsher, "A Chinese Revaluation May Not Help U.S.," NYT Jan 14
• Stephanie Kirchgaessner, "US watchdog extends review Lenovo of deal," FT Jan 29
• Alan Beattie, "Ministers meet in Davos to revive trade talks," FT Jan 28
• DANNY HAKIM , "Taking Down the 'No Foreign Cars' Signs in Michigan," NYT, March 3
• "The Economics of Offshoring," Economist, Sept. 16, 2004.
• SURVEY: OUTSOURCING - A world of work," Economist (11/11/2004) [Note: Subscription required]
• Sources for SURVEY: OUTSOURCING," Economist.
• "Special report: The textile industry; the looming revolution," Economist (11/13-19/2004)
• "Putting up the barricades," (against China) Economist (April 25)

• "Central banks shift reserves away from US," FT Jan 24
• "China: A Reheated Economy," Economist Jan 25
• Chris Swann, "US trade gap mars boom in demand," FT Jan 28
• Louis Uchitelle, "Growth Pace of Economy Slowed to 3.1% in 4th Quarter," NYT Jan 29
• "The US economy: Storm clouds ahead," Economist, Jan. 27
• "China's exchange rate: Cock-a-doodle-doo," Economist, Feb. 3
• "The world economy: Still gushing forth," Economist, Feb. 3
• Paul Blustein, "Greenspan: Trade Deficit 'Poised to Stabilize'," Washington Post, February 4
• Remarks by Chairman Alan Greenspan, "Current account" at Advancing Enterprise 2005 Conference, London, England, February 4
• John M. Berry, "Greenspan Not Really Optimistic on Account Gap," Bloomberg, February 9
• Paul Blustein, "Trade Gap Hits Yet Another Record,"
• IMF, World Economic Outlook April 2005. Includes chapters on financial globalization and oil price increase impacts.
• "The economics of saving: The shift away from thrift," Economist April 7
• Krugman, "A whiff of stagflation,"NYT April 18
• Daniel Gross, "Let us praise slow growers,"NYT April 17
• "The World Economy: A Call to Action," Economist, April 15, 2005
• "The World Economy: Running out of puff?" Economist, April 15, 2005
• Jad Mouwad, "Oil's Lesser Role in U.S. Economy Limits Damage From High Prices,"NYT April 23
• "Oil on troubled waters,"Economist, April 28
• "The American economy: Wise men at ease,"Economist, April 28

News Sources

• Financial Times online Subscription form for student rate.
• New York Times online Free registration required.
• Washington Post online
• BBC news online
• Reuters online
• The Economist

Weblogs

• ArgMax.com Left leaning macro oriented blog.
• Brad DeLong's blog

Economics and Economic Policy Links

• Resources for Economists Extensive links to data sources, working papers and organizations.
• American Enterprise Institute Right of center think tank.
• Brookings Institution Moderate/left of center think tank.
• Institute for International Economics
• Institute for International Finance Think tank associated with international banks.
• Harvard University Center for International Development Global Trade Negotiations page
• Economic Policy Institute Left of center labor-oriented think tank.
• Prof. Roubini's WebPage on Global Macro Issues
• Morgan Stanley Global Economic Forum Commentary on international macro issues.

International Organizations

• International Monetary Fund
• Bank for International Settlements Central banks' central bank.
• The World Trade Organization Forum for regulation of world trade and investment.
• UN Conference on Trade and Development
• UNCTAD/WTO International Trade Center
• The World Bank
• The World Bank International Trade website
• International Trade and Development Center a joint World Bank - WTO website
• International Centre for Trade and Sustainable Development

U.S. Government Agencies

• White House Council of Economic Advisers
• White House Office of the U.S. Trade Representative
• Congressional Budget Office Nonpartisan analytical agency of the Congress.
• Federal Reserve Board
• Department of Commerce International Trade Administration
• U.S. International Trade Commission

Current and Historical Data

• White House Economic Briefing Room Contains current economic data.
• Bureau of Economic Analysis, Dept. of Commerce Data on GDP and components (the national income and product accounts) as well as other macroeconomic data.
• Bureau of the Census, Dept. of Commerce Data on the characteristics of the US population as well as of US firms.
• Bureau of Labor Statistics, Dept. of Labor Data on wages, prices, productivity, and employment and unemployment rates.
• Energy Information Agency, Dept. of Energy Data on on energy (electricity, gas, petroleum) production, consumption and prices.
• Statistical Abstract of the US A compilation of statistics about the US, from government and nongovernment sources.
• Economic Report of the President, various years. The back portion of this annual publication contains about 70 tables of government economic data.
• St. Louis Fed economic database Thousands of time series on economic activity, in an easily downloadable form.
• Economic Time Series page A large collection of economic time series.
• J.P. Morgan This site provides world financial data.
• NBER Data Specialized economic databases created by economists associated with the National Bureau of Economic Research.
• Federal Reserve Board data Monetary, financial and output data collected by the Nation's central bank.
• Penn World Tables Annual GDP and other data for over a hundred countries, expressed in dollars, after adjusting for differing price levels.
• International Trade Data page set up by Jon Haveman