Department of Economics - Alemayehu

1 Addis Ababa University Department of Economics MSc in International Economics COURSE OUTLINE MSc in International Trade Term II: Jan-June 2012/13 Instructor: Alemayehu Geda Professor & Most references in this course outline can be picked from my web page shown above. If you have difficulty in accessing an article drop me an email and the article or chapter you need. African educators may get my book for free, if you email me. International Trades: Course Outline for MSc of AAU Alemayehu Geda 2 Addis Ababa University Department of Economics MSc in International Economics Program Part I: International Trade This course outline is adopted from a similar course outline that I have prepared for AERC s PhD program (CPP) (see ).

2 Students are encouraged to cover all materials if they do have the time. But that is not a must for my MSc students. It is hopped that you will cover, however, the basic ones. Introduction To The Nature Of The Course This course is aimed at providing students an in-depth and rigorous analysis of advanced international Economics by relating the topics to the condition in Africa. The course addresses the following two sets of issues: International Trade issues: Theory International Trade issues: Policy The above topics will be related to trade issues in Africa.

3 Mode of Delivery: 2 hours of Lecture 1 hour Seminar to be given by students based on journal articles (the topic and reference to the seminar series is given in this course outline). Suggested Textbooks Alemayehu Geda (2012). Fundamental of International Economics for Developing Countries: A Focus on Africa. London/Basingstoke: Palgrave-McMillan. Feenstra, Robert C (2004). Advanced International Trade: Theory and Evidence. Princeton: Princeton University Press. Gandolfo, Giancarlo (1994). International Economics I: The Pure Theory of International Trade, 2nd revised edition.

4 Berlin: Springer-Verlag. Rivera-Batiz, Luis A. and Maria-Angels Oliva (2003). International Trade: Theory, Strategies and Evidence . Oxford: Oxford University Press. Bhagwati, and Srinivasan (1983). Lectures on International Trade. Cambridge, Mass: MIT Press. Bowen, Harry P., Abraham Hollander and Jean-Marie Viaence (1998). Applied International Trade Analysis. London: Macmillan. Alemayehu , Geda (2002). Finance and Trade in Africa: Macroeconomic Response in the World Economy Context. London: Pallgrave/Macmillan.

5 Additional Readings Chenery, H. and Srinivasan (1989) (eds.) Handbook of Development Economics , Vol. II, Amsterdam, North Holland. International Economics : Course Outline for AERC PhD Program Alemayehu Geda 3 Gene, Grossman and Kenneth Rogoff (eds.) (1995). Hand Book of International Economics , Vol. III (Amsterdam: North Holland). Ronald, Jones., and (eds.) (1984). Hand Book of International Economics , Vol. I and II (Amsterdam: North Holland) Oyejide, Ademola, Ibrahim Elbadawi and Paul Collier.

6 Regional Integration and Trade Liberalization in Sub Saharan Africa: Framework, (Volumes 1-3). London: Macmillan. Intermediate Level Textbooks (for Revision) Paul Krugman and Maurice Obstfeld (1999). International Economics : Theory and Policy. London: Addison-Wesley, 5th edition. Sodersten, Bo and Geoffrey Reed (1994). International Economics , 3rd edition. London: Macmillan. Williamson, John and (1991). The World Economy: A Textbook in International Economics . London: Harvester-Wheatsheaf.

7 PART I INTERNATIONAL TRADE THEORY AND POLICY Chapter-1: Introduction: An Overview of Trade and Finance (3 hours) This chapter reviews the major patterns of the trade and finance in the world economy. An attempt to locate the relative position of Africa will also be made. This will be done using trade (exports, imports, tariffs etc) and finance (flows of FDI, Portfolio, bilateral and multilateral finance) related data. The chapter also explore the meaning of economic globalization and how we can measure it using the existing data.

8 The chapter concludes by asking whether such patterns can be explained by trade and finance theories; and what will be the gain form such trade. Readings for Chapter 1: Bowen et al (1998) Chapter 1; World Bank, World and African Development Indicators data (on CD-ROM). Chapter 2: The Classical Model: The Smith and Ricardian Models (6 hours) In this chapter the theories of both absolute and comparative advantage will be examined. The chapter also deals with the importance of assumptions in constructing these models as well as the issue of gains from trade.

9 Economies of scale and the empirical testing of the Ricardian model will also be discussed. Readings for Chapter 2: Basic (Required) Readings Bhagwati, and Srinivasan (1983) Chapters 2 to 3 Bowen et al (1998) Chapter. 3 Feenstra (2004) Chapters 1-3 Gandolgo (1994) Chapter 2 Alemayehu (2002/2012) Chapters 1 and 2 Additional Readings Bhagawati, J (1964) The Pure Theory of International Trade: A Survey economic Journal, 74: 1-84. International Trades: Course Outline for MSc of AAU Alemayehu Geda 4 Chipman, (1965) A Survey of International Trade: Part I the Classical Theory , Econmetrica, 33:477-519.

10 Leamer, (1992) Testing Trade Theory , NBER Working Paper, No. 3957. Ricardo, David (1817).On the Principle of Political Economy and Taxation. Reprinted in Sraffa and Dobb (eds) The Works and Corresponds of David Ricardo, Vol I: David Ricardo On the Principle of Political Economy and Taxation. Cambridge: Cambridge University Press Shaikh, Anwar (1984) The Laws of International Exchange in Nell. Growth, Profits and Prosperity. Cambridge: Cambridge University press.