ECON 423 Lecture Notes - Lecture 1: Mercantilism, Comparative Advantage
17 Jan 2018
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Wednesday, september 7th, 2016: krugman, obstfeld, use slides, his summary then the book. International trade part of international economics: trade: real side of transactions (real: no explicit measures, monetary side: exchange rate, etc. An international trade issue: currency change: an international money issue. Aims of the course: theory of international trade and trade policy. Notes on trade models/methodology: prediction about events in the world, can test them empirically, hard to make controlled environments in economics, explain a model, use them to discuss policy issues. Economic models: simplified but not too simplified. Assumptions: assume things to help control the environment. 2 main topics: gains from trade and trans-pacific partnership. Gains from trade: benefits from free trade: free trade argument: adam smith, won"t make shoes because it"s cheaper to buy them elsewhere: not efficient to make them himself if it costs more.
