assign14 - Intro Macro N. Sheflin ASSIGNMENT 14 NOTES:...

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I n t r o M a c r o N . S h e f l i n ASSIGNMENT 14 NOTES : Introduction to International Trade, International Finance and International Macroeconomics Essential Questions, Review Guide, Q&A schedule – later this week Final Exam Conflicts, special accomodations – see me after class NOW if you have not already. READING 13, 14, 10C (just the sub-section “MONETARY POLICY IN AN OPEN ECONOMY) There is lots here so focus on the major, simple punch lines explained below. In the International Monetary System (13C) just know how flexible rates work and an idea of fixed rates (like China). http://gregmankiw.blogspot.com/2010/07/trilemma.html Mankiw on the Trilemma Globalization at http://www.frbsf.org/publications/economics/letter/2004/el2004-12.html Perhaps helpful Fed Point piece on floating exchange rates at http://www.ny.frb.org/aboutthefed/fedpoint/fed44.html Fed Point piece on fixed exchange rates at http://www.ny.frb.org/aboutthefed/fedpoint/fed38.html Fed Point on Balance of Payments at http://www.ny.frb.org/aboutthefed/fedpoint/fed40.html and Optional, on role of $ in international economy: http://www.ny.frb.org/research/current_issues/ci16-1.pdf KEY POINTS read 3 times, carefully - once before the book, once after and during hw 1. (Not in book) Free Trade is potentially beneficial to all trading partners, although not necessarily equally so o Due to comparative advantage, that is when countries specialize in whatever production they have a relative advantage in (lowest opportunity cost ) o Also, trade leads to increased competition and transmission of ideas and technology o Thus barriers to trade are ‘bad’ o Quota’s, tariffs, restrictions on dumping all reduce gains from trade. Attempts to ‘save jobs’ are very expensive per job and inefficient ± However, trying to assist those who lose jobs with retraining, tax breaks etc may
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This document was uploaded on 10/25/2011 for the course ECONOMICS 01:220:103 at Rutgers.

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assign14 - Intro Macro N. Sheflin ASSIGNMENT 14 NOTES:...

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