Economics 3370

World Economy

Professor: Douglas Nelson

Office: Tilton 108 (Murphy Institute), Phone: 865-5317

Office Hours: Tuesday and Thursday, 3:30-5:30

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 migration, 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.

This course offers a non-technical introduction to the analysis of international economic issues. The goal of the course is to increase your knowledge of these issues and your tools for analyzing them. While we will be primarily interested in developing standard microeconomic and macroeconomic approaches to these issues, we will also attempt to present a variety of other useful approaches from political science, sociology and less mainstream parts of economics. Among the specific issues with which we shall be concerned this semester are: protection and protectionism; the multinational firm; the debt crisis; international macroeconomic policy coordination; and European integration.

Prerequisites: Although this course is “introductory” and “non-technical”, it is still an economics course. Thus, some exposure to micro- and macroeconomics is necessary to effective class participation. Specifically, you will need Econ 101 and 102. 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 skill consistent with high school algebra and geometry.

Evaluation: Your performance in this course will be evaluated on the basis of 2 examinations (worth 100 points each) and a large number of exercises to be completed in Aplia (100 total points). To receive an A, you must earn at least 90 percent of the points available. To pass the course you must earn at least 60 percent of the points available. Grades between these limits will be determined on the basis of your performance relative to that of the class as a whole.

The text for the course will be:


Robert Carbaugh (2011). International Economics. Mason, Ohio: South-Western Cengage. [Carbaugh]

Homework The Carbaugh text is linked to Aplia. Thus, homework will be completed and graded online. You may miss 2 homeworks 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 Aplia is on the next page of this syllabus. Homework must be completed no later than 11:45pm (Central time). Aplia will not accept any work submitted later than this.

Examination format. Both exams will have the following format: about 40% short answer questions and about 60% 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). Examination questions must be answered in bluebooks, which you must provide.

Policy on examinations. The midterm exams will be given on Thursday, 16 October in class. 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. The final exam will be given during the final examination period. That is, it will only be given on: Friday, 14 December 2012, 8:00-12:00 (there will be no exceptions so do not make travel plans that conflict with this).

Honor Code: All students are responsible for knowing and adhering to Tulane University’s Honor Code, available at

Some Good Advice (At No Extra Charge): First, keep current with the reading. That will allow you to make the most of lecture. Second, do the homeworks in Aplia. These provide both practice and a general check on how well you are understanding the material. Third, form a study group and do the exercises together. Actively presenting your answers to others is one of the best ways to test your knowledge. 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 Aplia for this course

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


    1.       Connect to

    2.       Complete the Configuration Test and make adjustments to your configuration if necessary.

    3.       Return to the Sign In page and click Create a New Account.

    4.       Choose Student Account.

    5.       You will then be asked to enter your course key, which is: GV6M-UEHB-QUS9

    6.       You will be prompted to enter your e-mail address and select a 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.

Student benefits: By completing regular work in association with the lectures, you will be better prepared for the lectures and exams in the course. Cramming is not an effective method of learning. Think of the regular assignments on Aplia as a weekly workout. Practicing and applying what you are learning from Aplia and lectures will better prepare you for class.

Aplia assignments: Most Aplia 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.

The cost of Aplia is $122.00 (from Aplia, $148 from bookstore) per student for this class for the semester. You may register and use the website until 11:59 PM on 09/16/2012 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 Aplia 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 Aplia site. This course fee will include access to a digital copy of the text through the Aplia site, so you have to buy a physical textbook only if you desire one.ital textbook. It might also be possible for students to purchase a physical copy of the text from Aplia.

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

How to access your Aplia course


Nelson, International Economics, Fall 2012

Instructor: Douglas Nelson
Start Date: 08/27/2012
Course Key: GV6M-UEHB-QUS9


Aplia is part of CengageBrain, which allows you to sign in to a single site to access your Cengage materials and courses.


1. Connect to

2. If you already have an account, sign in. From your Dashboard, enter your course key (GV6M-UEHB-QUS9) in the box provided, and click the Register button.
If you don't have an account, click the Create a New Account button, and enter your course key when prompted: GV6M-UEHB-QUS9. Continue to follow the on-screen instructions.



Online: Purchase access to your course (including the digital textbook) from the CengageBrain website.


Bookstore: Purchase access to Aplia from your bookstore. Check with the bookstore to find out what they offer for your course.


After paying, you will have the option to purchase a physical book at a discounted price. If you choose to pay later, you can use Aplia without paying until 11:59 PM on 09/16/2012.


Text via


According to


At, students have the option to purchase print textbooks, rent textbooks, eBooks or individual eChapters, all for substantial savings over average retail prices. also includes Cengage Learning's broad range of digital solutions, study tools, and a selection of free content.


Below is the product link for Econ 3370 World Economy. Once students click on this link it will direct them to the purchase page of the text for the course.


International Economics


Aplia Printed Access Card for Carbaugh's International Economics, 13th


International Economics


International Economics


As an added bonus, we're offering an exclusive promotion for your students: $10 off any purchase of $80 or more with coupon code FALL2012* Please provide your students with this coupon code in addition to the ordering link so they can save even more money and get the right product for your course!


*Coupon code expires 9/30/2012 and excludes Rental, Aplia and Microsite purchases.


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:

1. 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.

2. 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.

3. 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 and investment (real and financial).

4. Apply the tools of economic analysis to specific policy issues at a level appropriate to both majors in Economics and the University community more generally. This is a lower level class, so the tools applied to the analysis of the world economy are those consistent with such a level.

5. Gain an in-depth understanding of several specialized areas in economics, thereby learning how to apply microeconomic and macroeconomic 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;

The rudiments of balance of payments accounting and its relationship to national income accounting;

The nature and implications of international capital mobility;

The relationship between globalization (mainly capital mobility) and financial crises; and

The implications of globalization (again, mainly capital mobility) for macroeconomic performance and policy.

Economics 3370                             SYLLABUS                                        Fall 2012


Topic I. Introduction to the World Economy


● 28 & 30 August: Introducing the Global Economy


■ Carbaugh, Chapter 1

■ Aplia Homework


Topic II. International Trade


● 4 & 6 September: Trade and Comparative Advantage


■ Carbaugh, Chapter 2

■ Aplia Homework


● 11 & 13 September: Endowments and Comparative Advantage


■ Carbaugh, Chapter 3

■ Aplia Homework


● 18 & 20 September: Economics of Tariffs


■ Carbaugh, Chapter 4

■ Aplia Homework


● 25 & 27 September: Economics of Non-tariff Barriers


■ Carbaugh, Chapter 5

■ Aplia Homework


● 2 & 4 October: International Factor Mobility


■ Carbaugh, Chapter 9

■ Aplia Homework

Noel Gaston and Douglas Nelson. “Immigration and Labour-Market Outcomes in the United States: A Political-Economy Puzzle”. Oxford Review of Economic Policy , 2000, V.16-#3, pp. 104-114.

Giovanni Peri (2010) “The Effect of Immigrants on U.S. Employment and ProductivityEconomic Letters, Federal Reserve Bank of San Francisco, August 30, 2010.


Midterm Review: 9 October

No Class, Fall Break: 11October

Midterm: 16 October.


Topic III. International Money and Finance


● 18 & 23 October: Balance of Payments


Carbaugh, Chapter 10

■ Aplia Homework


● 25 & 30 October: Foreign Exchange


Carbaugh, Chapter 11

■ Aplia Homework


● 1 & 6 November: Exchange Rate Determination


Carbaugh, Chapter 12

■ Aplia Homework


● 8 & 13 November: Open Economy Adjustment


■ Carbaugh, Chapters 13 & 14

■ Aplia Homework


● 15 & 20 November: Exchange Rate Systems and Currency Crises


■ Carbaugh, Chapter 15

■ Aplia Homework


No Class, Thanksgiving break: 22 November


● 27 & 29 November: Open Economy Macroeconomic Policy


■ Carbaugh, Chapter 16

■ Aplia Homework


● 4 & 6 December: International Banking


■ Carbaugh, Chapter 17

■ Aplia Homework


Final Examination: 14 December, 8:00-12:00.