Dartmouth College Department of Economics Winter 2002 ECONOMICS 49 TOPICS IN INTERNATIONAL ECONOMICS Prof. Nina Pavcnik Office: 319 Rockefeller Phone: 646-2537 E-Mail: Nina.Pavcnik@Dartmouth.edu Class Web Page: www.dartmouth.edu/~npavcnik/econ 49 Office Hours: Mondays and Wednesdays: 3:30-5pm Or By Appointment Course Description The course will explore several topics in international economics, with a focus on international trade. We will explore the political economy of trade policy, the debate on openness and growth markets, and the debate on trade and labor markets. We will also study how international trade affects firm behavior such as price-setting, firm turnover, and the decision to enter the export markets. Readings Readings come primarily from academic journals. Copies of the readings are on reserve in a binder at Baker. You can also download some of these readings from the class web page. Krugman and Obstfeld International Economics (which you may have from Economics 29 or 39) is a very useful reference. Requirements You are required to do all the readings for each class, to attend class, and to participate in class discussions. You will be assigned one class for which you will be responsible for leading class discussion. Once you have signed to lead a discussion on a certain date, I regard that as an inviolable contract! When you are not leading class discussion, you will need to turn in the evaluation of the relevant readings at the beginning of the class. You don't need to turn the evaluation of the survey readings (no handwritten answers are accepted). I will provide you with the template questions for the evaluation. If you miss a class, you need to email me the evaluation BEFORE the class. Class assignments and participation will count for 40 percent of your grade (20% for leading class discussion, 20% for participation). In addition to class participation assignments, the major requirement for the course is research paper of no more than 15 double-spaced pages of text (not counting references, data, tables, and figures). The paper can address any issue in international trade, but you are highly encouraged to draw from issues covered in the seminar. Over the course of the term, you will choose a topic, compile a reading list, write a literature review, gather data, analyze your data, write a rough
draft, present your work, and submit a final draft. Because I don't want anyone to get too far behind, you will need to turn in each of these steps by specified due dates noted on the class schedule. I will give detailed descriptions of what is expected. The research paper (and intermediate steps) will count for 60 % of your grade. X-Hours The X-hour for this class is scheduled for Thursdays 9:00-9:50am (for the class meeting at 9L) and Thursdays 12-12:50 (for the class meeting at 10). See the schedule for the list of X-hours. Some useful resources for your paper: 1. Dartmouth Library Economics librarian: Miles Yoshimura Government publications librarian: John Cocklin You should contact Miles or John if you have questions about the available data or sources for your paper. Miles has compiled a wonderful web site with many links to economics data, economics journals,...: http://www.dartmouth.edu/~baker/econ.html 2. Social Science Computing (SSC) Contact: Chad Ferrigno and student helpers Location: Silsby 26, make sure you visit them during lab hours and make an appointment SSC provides help installing Stata and can answer basic questions about Stata. Students who need help with other computer concerns including other applications, their computer, and the network should seek such help at the Help Desk. Their number is 646-2999. SSC staff can also download ICPSR data for students if the specific data set(s) is identified by the student. An appointment must be scheduled as above. If the student needs assistance with finding data, they will be referred to the library and/or the ICPSR website. 3. Class Web Page (www.dartmouth.edu/~npavcnik/econ49) I have many links to data sources, journals, organizations, international economics news that you might find useful during your project. Useful Economics Links: links to on-line journals, economics resources at Dartmouth, National Bureau of Economic Research (NBER), Trade Links: links to U.S. and international institutions, Global Trade Negotiations weekly updates on news about international trade policy, disputes, Data Links: this site should be the starting point when you begin searching for data for your research project 2
SCHEDULE Date Topic Required Readings Project Deadlines 01/04 Friday Introduction Globalizationa survey Political Economy of Protection (Rodrik, Krishna and Gawande: skim these readings) 01/07 Monday What determines U.S. trade policy? 01/09 Wednesday A Guide to Conducting an Empirical Research Project 01/10 Thursday Is trade protection for sale? X-Hour Evidence from Industry Lobbying 01/11 Friday No class 01/14 Monday Is trade protection for sale? Evidence from Congressional Voting 01/16 Wednesday What determines Individual Trade Preferences? 01/18 Friday How harmful are trade barriers? The impact of trade barriers on import penetration 01/21 Monday No class 01/23 Wednesday Data Sources, Introduction to Stata Openness and Growth 01/24 Thursday Relationship between trade and X-Hour growth: old evidence 01/25 Friday Relationship between trade and growth: some new evidence 01/28 Monday No Class 01/30 Wednesday Trade and Growth: current controversy 01/31 Thursday X-Hour Trade and Growth: current controversy Ray Ray Goldberg and Maggi Baldwin and Magee Scheve and Slaughter Harrigan, Trefler Sachs and Werner Frankel and Romer Rodriguez and Rodrik Rodriguez and Rodrik Trade and Labor Markets (Feenstra and Hanson (2001)) 02/01 Friday Overview Feenstra and Hanson(2001) 02/04 Monday Multinationals and Labor Feenstra and Markets 02/06 Wednesday Multinationals and Labor Markets Hanson Blonigen and Slaughter Topics Due Literature Review Due 3
Date Topic Required Readings 02/07 Thursday Exporting Activity and Labor Bernard and X-Hour Markets Jensen 02/08 Friday No class 02/11 Monday Trade Policy and Labor Markets Gaston and Trefler, Goldberg and Pavcnik 02/13 Wednesday Catching up Project Deadlines Data Set Due International Trade and Firms (Tybout) 02/15 Friday The impact of Foreign Competition on Markups 02/18 Monday Why are exporters more productive? 02/20 Wednesday Firm turnover and international trade 02/22 Friday No Class Individual Appointments 02/25 Monday No Class due to evening session 02/27 Wednesday No Class due to evening session Evening Student Project Presentations for TBA Section 1 (9L) (Section 1) 02/28 Thursday Evening TBA (Section 2) Student Project Presentations for Section 2 (10) 03/01 Friday No Class due to evening session Harrison Bernard and Jensen Aw, Chen, and Roberts 3.5 to 4 hour session (pizza and drinks provided) 3.5 to 4 hour session (pizza and drinks provided) Preliminary Analysis Due Paper presentation with Data Analysis Paper presentation with Data Analysis 03/04 Monday No Class due to evening session 03/06 Wednesday Wrap Up Final Draft Due 4
Required Readings: (* indicates literature surveys, you should only skim those) 1. Political Economy of Trade Protection *Krishna, Pravin, and Kishore Gawande (2001). The Political Economy of Trade Policy: Empirical Approaches", Brown University manuscript. *Rodrik, Dani (1995). "Political Economy of Trade Policy," in G.M. Grossman and K. Rogoff (eds.), Handbook of International Economics, Vol. III, Amsterdam: North-Holland. Ray, Edward J (1981). "The Determinants of Tariff and Nontariff Trade Restrictions in the United States", Journal of Political Economy 89: 105-121. Goldberg, Pinelopi and Giovanni Maggi (1999). "Protection for Sale: An Empirical Investigation", American Economic Review 89: 1135-1155. Baldwin, Robert and Christopher Magee (2000). "Is Trade Policy for Sale? Congressional Voting on Recent Trade Bills," Public Choice 105: 79-101. Scheve, Kenneth and Matthew J. Slaughter (2001). "What determines Individual Trade Policy Preferences?" Journal of International Economics 54: 267-292. Harrigan, James (1993). "OECD Imports and Trade Barriers in 1983", Journal of International Economics 35: 91-112. Trefler, Daniel (1993). "Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of US Import Policy," Journal of Political Economy 101: 138-60. 2. Openness and Growth Sachs, Jeff and Andrew Warner (1995), "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity 1, pp. 21-35. Frankel, J. A. and Romer, D. (1999), Does trade cause growth?, American Economic Review 89, 379-99. Rodriguez, Francisco and Dani Rodrik (1999). Trade Policy and Economic Growth: A Skeptic s Guide to the Cross-National Evidence, NBER Working Paper No. 7081. Cause, Effect, and the Wealth of Nations, The Washington Post, November 4, 2001 3. International Trade and Labor Markets *Feenstra C. Robert, and Gordon Hanson (2001). "Global Production Sharing and Rising Inequality: A Survey of Trade and Wages", NBER Working Paper 8372. 5
Feenstra, Robert C. and Gordon H. Hanson (1997). "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics 42, pp. 371-393. Blonigen Bruce, and Matthew J. Slaughter (2001). "Foreign-Affiliate Activity and U.S. Skill Upgrading", Review of Economics and Statistics 83: 362-376. Bernard, Andrew B. and J. Bradford Jensen (1999). Exporters, skill upgrading, and the wage gap, Journal of International Economics 42, 3-31. Gaston, N. and D. Trefler (1994). Protection, Trade and Wages: Evidence from U.S. Manufacturing, Industrial and Labor Relations Review, Vol. 47, No. 4, pp. 574-593. Goldberg Koujianou Pinelopi and Nina Pavcnik (2001). "Trade, Wages, and the Political Economy of Trade Protection: Evidence from the Colombian Trade Reforms." 4. International Trade and Firms *Tybout, James R. "Plant- and Firm-Level Evidence on "New" Trade Theories", NBER Working Paper 8418. [This provides and excellent literature survey]. Harrison, Ann E. (1994). Productivity, imperfect competition and trade reform, Journal of International Economics 36, pp. 53-73. Bernard, Andrew and Bradford Jensen (1999). "Exceptional exporter performance: cause, effect, or both?", Journal of International Economics 47: 1-25. Aw, Bee Yan, Xiaomin Chen, and Mark J. Roberts (2001), "Firm-level evidence on productivity differentials and turnover in Taiwanese manufacturing", Journal of Development Economics 66: 51-86. 6