AZUSA PACIFIC UNIVERSITY

SCHOOL OF BUSINESS & MANAGEMENT

ECON 372: International Trade & Finance

Spring 2008, Roger B. Conover

rconover@apu.edu , Wilden 219

Phone: (626) 815-3823; Fax: (626) 815-3802

 

Azusa Pacific University

MISSION STATEMENT

 

Azusa Pacific University is an evangelical Christian community of disciples and scholars who seek to advance the work of God in the world through academic excellence in liberal arts and professional programs of higher education that encourage students to develop a Christian perspective of truth and life.

 

SCHOOL OF BUSINESS AND MANAGEMENT

MISSION STATEMENT

 

The mission of the School of Business and Management is to advance the Kingdom of God by integrating a Christian perspective into life through business and management education. We are dedicated to maintaining a dynamic teaching environment where current, relevant business theories and practical tools are implanted, and students develop linkages between faith, learning and application

 

 

Summary of Course:

This course presents the basics of both International Trade and International Finance in a concentrated, integrated experience focusing on policy and business applications, as well as covering theoretical frameworks. The course is designed to challenge students to think about the international exchange of goods, services and financial capital in a systematic and structured way. It is designed to provide them with tools to better understand how the differences between countries can provide opportunities for national growth and development in a cooperative environment, yet can also lead to economic (and political) conflict.

 

The course will cover international trade models, debates over protection and free trade, historical and current international trade agreements and regional trading blocs. The course will also discuss international financial flows, the foreign exchange markets, and international banking systems on a comparative basis.

 

Course Objectives: By the end of this course, students should be able to demonstrate that they:

 

1. Understand why countries can benefit from free trade and why the amount that each benefits may not be the same.

 

2. Understand why barriers to trade exist, and why the countries that impose them may perceive them as justifiable.

 

3. Understand the principle assumptions and applications of major theories of international trade and their implications for the growth of national economies.

 

4. Understand current developments in international trading arrangements and how they have come into existence.

 

5. Understand how foreign exchange markets function and the variety of issues that influence the determination of exchange rates.

 

6. Understand how inflation and interest rates in one country can influence the economic well being of other countries.

 

7. Understand how changes in foreign exchange markets can influence the decisions of international investors and businesses.

 

Required Text:

- International Economics, 13th Ed., by Thomas Pugel. (Irwin McGraw-Hill, 2007).

- Additional readings as assigned.

 

Office Hours: Drop by my office Monday 10:30 – 12 noon and Wednesday 1:30 – 3 PM, or make an appointment with me. E-mail also works for some questions.

 

Classroom Decorum:

Please respect and love your fellow students. Demonstrate that love by preparing for the day’s class ahead of time so that you can actively share your insights with the others. Come to class on time. Refrain from talking except in the general discussion. Do not pass notes to one another in class. Be civil and courteous to one another. Correct those who fail to show respect for the rest of the class, but do so in love.

 

Attendance Policy:

Students are expected to attend every class, and attendance will be taken. Students that arrive after class has begun will be counted as absent. Points will be deducted from a student’s final score according to the following schedule:       0 to 2 = 0;       3 or more = 20 points each.

Students that are late or absent because of an approved university event must inform the instructor prior to such an event. While students are still responsible for assignments due and material presented on such days, this absence will not be counted against their total.

 

Academic Honesty:

Students in this and all courses at Azusa Pacific University are expected, as part of their enrollment, to uphold the following Academic Integrity Pledge:

 

“As a student at this Christ-centered University, I will uphold the highest standards of academic integrity.  I will not lie, cheat, or steal in my academic endeavors, nor will I accept the actions of those who do.  I will conduct myself responsibly and honorably in all my academic activities as an Azusa Pacific University student.”

                       

The mission of Azusa Pacific University includes cultivating in each student not only the academic skills that are required for a university degree, but also the characteristics of academic integrity that are integral to a sound Christian education.  It is therefore part of the mission of the university to nurture in each student a sense of moral responsibility consistent with the biblical teachings of honesty and accountability.  Furthermore, a breach of academic integrity is viewed not merely as a private matter between the student and an instructor but rather as an act which is fundamentally inconsistent with the purpose and mission of the entire university.  A complete copy of the Academic Integrity Policy is available in the Office of Student Life, the Office of the Vice Provost for Undergraduate Programs, and online.

 

You may not give or receive any assistance on on-line or in-class quizzes and exams except from the course professor. On the homework, you may ask questions and discuss the problems with other students currently enrolled in the course, but you may not copy any part of anyone’s work. Any work throughout the course that appears to have been copied from another source violates the standard of academic integrity. Because of the difficulty in establishing “who copied from whom,” if any homework, quizzes or exam papers do appear to be copied, or other cheating occurs, all students involved will receive zero points for that assignment. Second violations will result in all students involved being assigned a grade of “F” for the course. Signing a role sheet for another student is considered forgery and will result in being assigned a grade of “F” for the course. Any other acts of academic dishonesty will be dealt with in a similar manner. In any case of a suspected violation of the standards of academic integrity, the incident will be reported to the Vice Provost’s office and further steps may be taken in accordance with the Academic Integrity Policy of the University.

 

General Grade Expectations:

Your grade will depend upon your performance on the assigned problem sets, papers and presentations, exams and on your participation in class. No extra credit is available except as may be occasionally announced in class. Students who are concerned about their grades should see the instructor as early as possible during the semester to work out possible strategies for improving your performance. Grades will not be changed after the course is over except in the case of clerical error. Grade appeals procedures may be found in the Student Handbook.

In general, the following guidelines will apply to this course. Your specific grade will be determined by the point total that you accumulate throughout the course.

 

Grade A: Outstanding knowledge regarding details, assumptions and implications of quantitative analysis; demonstrates superior thinking with information relevant to application, critique, relationship to other information.

B: More than adequate knowledge regarding technical terms, distinctions, ability to begin using information; demonstrates ability to think clearly about the information and its relationship to other information.

C: Basic knowledge needed to function and carry on learning regarding major principles, central terms, major figures, awareness of the field.

D: Serious gaps in knowledge, confusion of concepts and categories, inability to recall basic information.

F: Absence of knowledge, incapable of carrying on a conversation about the subject, misunderstands most concepts, confuses all categories.

 

Specific Grading Policy: There are 400 points possible in the course:

 

            Problem sets (7x25)                                                            175     (90% scale)

            Midterm Exam                                                          100     (Scale TBA)

            Final (comprehensive)                                           125     (Scale TBA)

                                                                                                400

 

The exam and the final will consist of a combination of objective/short answer problems, multiple choice problems and essay questions. The final will be comprehensive, but weighted toward the material in the latter half of the course. You will need a bluebook and Scantron for both exams. No notes or study aids (including the papers of other students) may be used. Calculators will be needed.

 

The problem sets will be assigned from the end-of-chapter questions in the textbook. They are due at the beginning of the class on the day indicated. Make copies of your work, since you will turn in the papers and then we will review the material. No late problem sets will be accepted.

 

Exceptions to due dates: With the approval of a valid, documented excuse, (e.g. sickness with signed medical excuse, etc.), alternative arrangements can be made. Students who are absent because of an approved university event must inform the instructor prior to such an event. Students are expected to contact the course professor as soon as possible to obtain approval and schedule make-ups.

 

Preparation:

Students are expected to come to each class fully prepared.

 

 

Educational Support:

Please make use of my office hours or make an appointment with me. I would be happy to help in whatever way I can.

 

Any student in this course who has a disability that might prevent them from fully demonstrating their abilities should meet with an advisor in the Learning Enrichment Center as soon as possible to initiate disability verification and discuss accommodations that may be necessary to ensure your full participation in the successful completion of course requirements.

 

Revisions:

This syllabus may be revised during the semester by the professor as needed, including problem assignments, due dates and exam dates and coverage. Any revisions will be announced in class.

 

PROBLEM SET ASSIGNMENTS

 

The following exercises are found at the end of the indicated chapter. Please make sure that the problem set that you turn in is neat and readable. Complete answers will include explanations of why you have answered as you have. For questions, you should type your answers, and you must answer in your own words (just copying sentences from the text is NOT acceptable, nor is copying from friends). For problems, you must show your work (neatly, but no need to type) to get credit. Indicate your final answers by putting a box around them.

 

 

Assignment #1

Chapter 2:     4, 7, 10

Chapter 3:     2, 8, 10

Assignment #2

Chapter 4:     3, 5, 6, 7

Chapter 5:     1, 7, 8, 10

Assignment #3

Chapter 6:     4, 6, 7, 8

Chapter 7:     3, 8, 11, 12

Chapter 8:     2, 5, 7

Chapter 9:     5, 6, 9

Assignment #4

Chapter 10:   4, 8, 10, 11

Chapter 11:   1, 3, 9, 10

Chapter 12:   1, 4, 7, 9

Assignment #5

Chapter 16:   5, 6, 8

Chapter 17:   4, 8, 9, 10

Assignment #6

Chapter 18:   3, 4, 6, 8

Chapter 19:   2, 4, 7, 11, 12

Assignment #7

Chapter 20:   3, 6, 11

Chapter 21:   2, 5, 6, 10

 

 

 

 

 

 

 

SCHEDULE OF CLASS MEETINGS

IBUS 372- International Trade and Finance

 

DATE               TOPIC                                                               HAVE READ     NOTES

 

Week 1: Jan 8      An Introduction to International Trade.              1.

   Tools of Analysis for Int’l Trade Models.          2.

 

Week 2: Jan 15   Comparative Advantage and Int’l Trade.            3.                    

 

Week 3: Jan 22   Factors of Production and Trade                      4.                     PS 1 Due (T)

  Winners and Losers in Trade                            5.

 

Week 4: Jan 29   Alternative Theories of Trade;                           6.                     PS 2 Due (T)

  Trade and Economic Growth                            7.

 

Week 5: Feb 5    Tariffs                                                             8.                    

  Non-tariff Barriers                                            9.

 

Week 6: Feb 12   To Protect or Not to Protect    .                       10.                    PS 3 Due (T)

 

Week 7: Feb 19   Export Policy                                                  11.

                           Trading Blocs                                                 12.

 

Week 8: Feb 26   Trade and the Environment                              13.                    PS 4 Due (T)

 

Week 9: Mar 4      MIDTERM EXAM (Tuesday)                            Ch. 1-13

                           Common Day of Learning (Wednesday)

   Introduction to International Finance (Thurs)     Chapter 16

 

Week 10: Mar 11  The Balance of Payments;                              ---

    The Foreign-Exchange Market.                       17.

 

March 15 – 24:                       EASTER VACATION!

 

Week 11: Mar 25  The Foreign-Exchange Market.                        ---                    

 

Week 12: Apr 1   Exchange Risk Management                            18                     PS 5 Due (T)

 

 

Week 13: Apr 8   Long-run Exchange Rate Determination            19                    

 

Week 14: Apr 15    Exchange Rate Policy                                   20                     PS 6 Due (T)

 

Week 15: Apr 22    International Lending, Financial Crises            21                     PS 7 Due (Th)

 

Finals Week: April 28 – May 2. Check Schedule of Classes for Time.