Professor: Douglas Nelson

Office: 108 Tilton Hall

Office Hours: TR 3:30-5:00, and by appointment

Phone: 865-5317



Even the most cursory reading of the news should alert us to the importance of international economic relations. In its more spectacular forms, these relations are front page news, but even in their more mundane forms international trade, international investment, and international money affect our lives in profound and intimate ways. Whether to increase our effectiveness in our directly economic pursuits or to meet the burdens of good citizenship, an understanding of these forces is clearly important.

In this course we extend the ideas and tools developed in intermediate microeconomics to the study of international economic relations. We begin by studying a number of simple models of trade between nations that attempt to explain that trade in terms of a small number of basic facts about the economic conditions characterizing nations: technology, tastes, and endowments of factors of production. While the neoclassical model provides a solid basis for beginning an analysis of the international economy, recent advances in theory and research permit us to go well beyond that model in our analysis. Thus, we extend these basic models to incorporate such important phenomena as migration, foreign direct investment, imperfect competition, and firm detail. Using the theoretical and empirical tools we have developed, we finish the course by studying the arguments for free trade and protection.

The primary reading material for this course will be found in the following textbook (which can be purchased online or at the Tulane University bookstore):


Krugman, Obstfeld & Melitz (2015). International Economics. Boston: Pearson. (Text)

Supplementary material, including the homework problems, can be found in:


MyEconLab: go to to register.

Course Prerequisites. International economics is a branch of economics and, as such, it builds on existing ideas and tools from other branches of economics, especially microeconomics and macroeconomics. The material presented in both lecture and text assume that you have had an intermediate microeconomics course (ECN 3010 or 3030) and the prerequisites to that course. We will be making substantial use of algebraic and geometric argument in this class and it is assumed that you have a level of mathematical knowledge consistent with high school algebra and geometry.

Evaluation. Your performance in this course will be evaluated on the basis of two examinations and weekly homework assignments. Each examination will be worth 100 possible points and your homework will be worth 100 possible points. To earn a grade in the A range you must earn at least 90 percent of the 300 available points. To pass the course you must receive at least 60 percent of the available points. The grades between these two limits will be determined by the distribution of points in the class as a whole.

Homework The Krugman/Obstfeld/Melitz text is linked to MyEconLab. Thus, homework will be completed and graded online. You may miss 1 homework without penalty. Any further missed homework will enter as a zero in your overall average. At the end of the semester, your homework score will be the percent (i.e. out of 100) of the questions attempted that you answered correctly (treating missed homeworks beyond 2 as attempted but zero score). That score will be 1/3 of your final score. Additional information on MyEconLab is on the next page of this syllabus. Homework must be completed no later than 11:45pm (Central time) of the night before we cover the material in class. MyEconLab will not accept any work submitted later than this.

Examinations. Both exams will have the following format: about 40% short answer questions and about 60% problems/essays. In general there will be more questions of both types than must be answered, so you will have some choice (though there is often one mandatory question which everyone must answer). Exams must be written in blue books, which you must supply. Sample exams will be available at on blackboard.

The midterm exam will be given in class on 16 October 2014. The final examination will only be given on the scheduled date: Tuesday 16 December 2014, 8:00-12:00. Unless you have a standard university accepted excuse for missing the exam (e.g. health with standard university form), you must take the exams at their scheduled time. In particular, holiday/travel plans are not an acceptable excuse. Failure to take the exam on the scheduled date will result in a score of 0.

Additional Exam and Homework Information: Exams will be returned in class, you can follow your homework performance on the MyEconLab website. Exam answer keys will be available from my webpage.

Some Good Advice (At No Extra Charge):

First, keep current with the reading. Not only will that maximize your homework grades, but it will allow you to make the most of lecture.

Second, do the homework. This is virtually free credit, and it will improve your performance on exams as well

Third, doing problems is a great way to build your skills with the various models we develop. The study guide contains a number of additional problems, with answers. Especially if you are feeling uncertain about your grasp of some material, you should do as many problems as you can.

Fourth, ask questions in class. If you read something and it is unclear and then it is unclear during lecture, ask about it. Your classmates will probably thank you. This is one of the few ways, before an exam, that I can gauge how the material is getting across.

Fifth, come see me during my office hours. This is another opportunity to get clarification and help on material about which you are unclear. But don't wait until the last minute, by then it is usually too late.

On MyEconLab for this course

Weekly homework assignments are found on the MyEconLab website. These assignments will collectively count for 1/3 of your grade. The MyEconLab site requires a separate registration process. Here are the steps:

Go to

1.   Under the large Register section on the right side of the page, and click the Student button.

2.   Read the onscreen instructions and click OK! Register now.           

3.   Next, enter the Course ID for this course: douglas93218 .           

4.   After this, either Create a new Pearson username and password, or, if you’ve already registered for another Pearson product (i.e. MyMathLab), Sign In with that username and password.       

5.   On the next page, click the Access Code button if you purchased a package with an access code from the bookstore, OR purchase instant access now by clicking on the purchase options under the Use a Credit Card or PayPal section.  

6.   You are now registered! Now, it’s time to sign. Go to and click the Sign In button in the top right. Enter your username and password.   

You will only need to register once. After the registration process is complete, you will not need to enter the course key again. For any technical or sign-in problems, please contact Support.

MyEconLab assignments: MyEconLab assignments must be completed and submitted by 11:45pm on the night before we cover a topic. Most MyEconLab assignments are graded. You will have three attempts at each question, and you will receive feedback about your answer and an explanation of the question. You also have the option to save your work and come back later to finish the question and check your answer; if you choose this option and do not return, the work you had completed will be graded at the due date. After the due date passes, you will be unable to change your answers or submit any new work. The software does not care whether you have an excuse or not. These assignments are posted weeks in advance. Complete them early to avoid any emergencies preventing you from finishing them before the due date.

You can buy MyEconLab online, from MyEconLab, for $105. MyEconLab without the code is $60. Alternatively, you can buy MyEconLab, with a hard copy of the text, from the bookstore for $185.70. Either way, you may register and use the website until [14 days] 11:59 PM on 09/15/2013 without paying the fee. If you are considering dropping this course during the drop/add period, do not make a payment until you are sure. You will need to pay the full amount before the end of the grace period to continue using the site. You may pay online with a credit card or MyEconLab Access Card available in the bookstore (this is only available if you order the bundle or standalone card), or you can mail a check or money order to the address provided on the MyEconLab site.

Disclaimer: I am not financially affiliated with MyEconLab and receive no monetary benefit from requiring this material.

Get Started with Pearson’s MyEconLab


First, make sure you have
these 3 things…

Email: You'll get some important emails from your instructor at this address.


Course ID: douglas93218


Access code or credit card: The required access code comes either with your book or by itself at your bookstore. Alternatively, you can buy instant access with a credit card or PayPal account during registration.

Next, get registered!


1.  Go to

2.  Under the large Register section on the right side of the page, and click the Student button.          

3.  Read the onscreen instructions and click OK! Register now.     

4.  Next, enter the Course ID for your course (listed above).         

5.  After this, either Create a new Pearson username and password, or, if you’ve already registered for another Pearson product (i.e. MyMathLab), Sign In with that username and password.      

6.  On the next page, click the Access Code button if you purchased a package with an access code from the bookstore, OR purchase instant access now by clicking on the purchase options under the Use a Credit Card or PayPal section.          

7.  You are now registered! Now, it’s time to sign. Go to and click the Sign In button in the top right. Enter your username and password.         





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SACS-Related Material


I am aware that Tulane students are able to read a standard university syllabus and determine the content of the course and its relation to the major and the individual student’s course of study. However, the administration of Tulane University, along with the Southern Association of Colleges and Schools (SACS–which “accredits” primary and secondary schools as well as all varieties of 2 and 4 year undergraduate programs [with very little in the way of adjustment in rubrics, metrics, etc.]), has determined that you require additional information. I collect this material in a separate section so that you can refer to it, or discard it, as you consider appropriate.


Relevant Program Outcomes Addressed in this Course:


I.Apply the basic (general equilibrium) market model to explain and predict price changes in individual as a function of changes in the international trade environment.

II. Identify and assess the opportunity costs involved in any economic activity, whether the decision-maker is a private individual, business firm, or social organization. Individual, firm and governmental decisions relating to international trade, investment, etc. will be analyzed in detail.

III.Identify economic issues and problems, gather data needed to evaluate them, and analyze that data to gain insights into economic behavior and formulate possible solutions. As the course objectives state at the beginning of this syllabus, we will be doing all of this with particular reference to international trade.

IV.Apply the tools of economic analysis to specific policy issues at a level appropriate to majors in Economics. This is an upper level class, so the tools applied to the analysis of the world economy are those consistent with such a level.

V.Gain an in-depth understanding of several specialized areas in economics, thereby learning how to apply microeconomic theory to specific policy issues. Same as (4).


“Learning Objectives”: Upon completion of this course you should have developed a practical knowledge of:

Comparative advantage (i.e. opportunity cost as applied between countries);

The role of technology, endowments, and market structure in the determination of comparative advantage;

The relationship between globalization (especially trade) and labor market outcomes;

The relationship of trade policy to national welfare and general economic performance; and

The nature and implications of international labor and (real) capital mobility.

ECN 4330-01                                                  SYLLABUS                                                         Fall 2014


Course Introduction


            August 26, 28: Course Introduction–Globalization


                          -Reading: Text, Chapters 1 & 2


Part I: Canonical Models of International Trade


            September 2, 4: Ricardian Model, I


                          -Reading: Text, Chapter 3, pp. 24-36


September 9, 11: Ricardian Model, II


                          -Reading: Text, Chapter 3, pp. 37-48.


            September 16, 18: Specific Factors and Trade, The Ricardo-Viner Model


                          -Reading: Text, Chapter 4, pp. 51-70 (i.e not 71-76).


            September 23, 25: The Economics of International Migration


                          -Reading: Text, Chapter 4, pp. 71-76.

-Reading: G. Borjas (1995). “The Economic Benefits from Immigration.” Journal of Economic Perspectives, V.9-#2, 3-22.

-Reading: Giovanni Peri (2006). “Immigrants, Skills, and Wages: Measuring the Economic Gains from Immigration”. Immigration Policy In Focus; V.5-#3.


            September 30, October 2: Factor-Intensities and Trade, The Heckscher-Ohlin Model, I


                          -Reading: Text, Chapter 5, pp. 84-94 and appendix (i.e. 114-117).


            October 7, 14: Factor-Intensities and Trade, The Heckscher-Ohlin Model, II


                        -Reading: Text, Chapter 5, pp. 109-120.



Spring Break, No Class 9-12 October

Midterm Exam: 16 October 2014


Part II: Extending the Neoclassical Model


October 21, 23: The Standard Trade Model


                        -Reading: Text, Chapter 6.


            October 28, 30: External Economies Scale & Monopolistic Competition


                        -Reading: Text, Chapter 7, pp. 145-158 and Chapter 8, pp. 164-181.


November 4, 6: Firms and Outsourcing in the Global Economy


                        -Reading: Text, Chapter 8, pp. 181-201.

-Reading: Bernard, Jensen, Redding and Schott (2007): “Firms in International Trade”. Journal of Economics Perspectives; V.21-#3, pp. 105-130.

-Reading: Melitz, Marc J. and Daniel Trefler. (2012). “Gains from Trade When Firms Matter.” The Journal of Economic Perspectives, V.26-#2, 91-118.

-Reading: M. Timmer, A.A. Erumban, B. Los, R. Stehrer, and G. de Vries. 2014. “Slicing Up Global Value Chains.” Journal of Economic Perspectives, 28(2): 99-118.


Part III: Economics of Trade Policy


            November 11, 13: Economics of Protection, I: Instruments of Protection


                          -Reading: Text, Chapter 9


            November 18, 20: Economics of Protection, II: Political Economy of Protection


                          -Reading: Text, Chapter 10


            November 26: No Class, Thanksgiving Break


            December 2: Economics of Protection, III: Import Substitution, etc.


                          -Reading: Text, Chapter 11


December 4: Economics of Protection, IV: Controversies in Trade Policy


-Reading Chapter 12Xx


Final Examination: Tuesday, 16 December 2014, 8:00-12:00.