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prof. Victor Polterovich 2000/2001ac/year The goal of this course is to expose the student to the basic facts of international trade theory and the usage of the corresponding models to the analysis of international trade policies. The presentation covers the first, non-monetary, part of modern textbooks in international economics theory. Along this, in order to generalize the presentation, the General Equilibrium approach, which usual fore more advanced textbooks, will be widely used. The course consists of 14 lectures. The grade is a weighted average of the grades for mid-term exam (0.3) and final exam (0.7). Introduction. Goals and Plan of the Course. The subject of International Trade Theory. The main problems: pattern of trade and terms of trade. The role of the government in international trade. The plan of the course. Literature: [K, part 1], [KO, ch.1].
Basic facts from General Equilibrium theory. Autarky Equilibrium. Gains from trade theorems. Strong and weak comparative advantage principle. Literature: [N, ch.5 (w/o proofs)], [P, ch.2-5(w/o proofs)], [DN, ch.1, p.2-8, ch.3, p.65-80, ch.4, p.93-96], [KO, ch.2, p.17-22].
The Ricardian model. The relation between average costs and autarky prices. The Ricardo-Winner Model. Generalizations. Empirical evidences on the Ricardian model. Literature: [DN, ch.2, p.36-43, ch.3, p.82-88], [KO, ch.2, p.11-29], [K, ch.3], [L].
The hypothesis of relative abundance of factors of production, the measure of abundance. The factor capacity of the good. The Hecksher-Ohlin model. Stolper-Samuelson and Rybczynski theorems. Empirical evidences on the Hecksher-Ohlin model. Leontief paradox. The problem of international trade influence on income distribution and Hecksher-Ohlin model. The weak form of relative abundance principle in general model: local and global cases. Factor price equilization. Literature: [DN, ch.3, p.85-87, ch.4], [KO, ch.4], [K, ch.4], [F], [L].
Could the country gain from the free of charge transfer of goods to another country? Immiserizing Growth. Direct investments. Multinational corporation. The impact of international labor mobility on world equilibrium. Literature: [DN, ch.5], [KO, ch.7], [K, ch.8].
Economies of scale and international trade. Oligopolistic trade model. The effects of increased market size on wealth. Literature: [KO, ch.6], [K, ch.7], [Kr, p.22-37].
Protectionism and the problem of foreign trade liberalization. History and problems of foreign trade liberalization in Russia. Optimal Tariffs and taxation. Trade policy under restraints. Tariffs and quotas: problem of equivalency. Literature: [DN, ch.6], [KO, ch.9-10], [BS, ch.10,11], [V].
Trade policy in developing countries. The support of manufacturing. The infant industry argument, imperfectness of capital market and losses of pioneering firms (appropriability argument). Import-substituting industrialization. Favor of export as the industrialization strategy. Coexistence of modern and ?? (economic dualism), the effect on foreign trade. Developing and advanced countries in trade. The role of multinational firms. Export cartels. Industrial policy in advanced countries. Arguments for industrial policy. The support of high technologies and externalities. Strategic trade policy and imperfect competition. Industrial policy in Russia. Literature: [KO, ch.11-12], [LM], [Kr, p.186-198], [HK], [V]. Literature. DN-Dixit, A.K., Norman, V. (1992). Theory of International Trade. Cambridge University Press. KO-Krugman, P.R., Obstfeld, M. (1994) International Economics. Theory and Policy. Harper Collins College Publishers. K-Kenen, P.B. (1994) The International Economy. Cambridge University Press. BS-Bhagvati, J.N., Srinivasan T.N. (1994) Lectures on International Trade. The MIT Press, Cambridge MA. F-Falvey, R.E. (1994) The Theory of International Trade. In: D. Greenaway, L.A. Winters (eds). Surveys in International Trade. p.9-43. L-Leamer, E.E. (1994) Testing Trade Theory. In: D. Greenaway, L.A. Winters (eds). Surveys in International Trade. p.66-107. LM-Laussel, D., Montet, C. (1994) Strategic Trade Policies. In: D. Greenaway, L.A. Winters (eds). Surveys in International Trade. p.177-206. Kr- Krugman, P.R. (1994) Rethinking international Trade. Cambridge:The MIT Press. HK - E.Helpman and P.R.Krugman. (1994). Trade Policy and Market Structure. The MIT Press, Cambridge, Massachusetts, (chs.5-6). OTW- K.H.O’Rourke, A.M.Taylor, J.G.Williamson. (1996). Factor Price Convergence in the Late Nineteenth Century. International Economic Review, v.37, N.3, August, 499-529. V- Vneshneekonomicheskiy complex Rossii: sovremennoe sostojanie i perspektivy. (in Rissian) Ì: ÂÍÈÊÈ, 1997. N-Nikaido, H. (1972) Convex Structures and Mathematical Economics. Moscow, Mir. P-Polterovich, V.M. (1990) Economic equilibrium and mechanism of governance. Moscow, Nauka.
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