Syllabus

ECO364H1F - International Trade Theory

Summer 2020 (Online)

Instuctor: Torsten Søchting Jaccard

E-mail: [email protected]
Oce Hours: tbd
Teaching Assistants:
• Guangbin (Jeremy) Hong: [email protected] (Oce Hours: tbd)

• Duong (Luke) Luu: [email protected]

• Rallye Shen: [email protected]

Objectives: This course introduces key concepts of international trade. Specically, we will
develop a theoretical framework to analyze the global market for goods and services. These
models will allow us to analyze both the determinants and the impact of trade on domestic
economic activity. Having developed these models, this course will provide students with
signicant experience accessing data related to international trade and analyzing this data
to test the predictions of canonical trade models. We will nish by discussing contemporary
issues regarding international trade. These include - but are not limited to - inequality,
oshoring and wages, taris and barriers to trade, and political economy relating to trade
policy.

Exclusion: ECO230Y1 / 328Y

Prerequisites:
1. One of: ECO200Y1, ECO204Y1, ECO206Y1, and
2. One of: ECO220Y1, ECO227Y1, STA247H1 or STA248H1, STA250H1 or STA255H1,
STA257H1 or ST1S61H1
I expect that you will be able to perform basic calculus, including simple partial and total
derivatives. I will also expect you to be able to perform simple linear regression using
ordinary least squares and xed eects (i.e. "dummy variables"). If you have concerns
about your ability to take this course, please e-mail me. The administration is, however,
very strict and does not generally allow for students who do not satisfy the prerequisites.

Textbook: Krugman, Melitz, and Obstfeld, International Trade: Theory and Policy, 11th

Edition Pearson, 2014. I will refer to this textbook as KMO when referenced in lectures.
This textbook is not mandatory, and you will not be required to know material in the book
that is not in the lecture slides. If you have an interest in international trade and wish to
pursue this subject either professionally or academically, I strongly recommend that you
purchase KMO to have as a reference. You are expected to be familiar with all material that
is posted on the course website.

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 Course Outline
This course will be front-loaded in terms of the workload for students. The rst four/ve
weeks will introduce the basic models used by economists to study international trade. It is
imperative that students gain an understanding of these models, and so the rst four/ve
weeks will be heavy on math and theory. Having established these models of trade, we will
pivot to an empirical study of a number of trade issues. The second half of this course will
revolve around these empirical questions, as well as a term project that will require students
to seek out data online and provide analysis - both statistical and written1 .
Each lecture will begin with three questions relating to the topic of that lecture. These
questions form the "Learning Objectives" of each lecture. The last slide of each lecture will
provide the answers that we reach after studying that lecture's material. If you want to
do well in this course, focus on the learning objectives. The following topics
constitute the rst half of this course, and form the basis of almost all contemporary
research on international trade:
• Topic 1: Introduction to the course and the Gravity Model
• Topic 2: Simple Exhange Economy
• Topic 3: Ricardian Model
• Topic 4: Specic Factors Model
• Topic 5: Heckscher-Ohlin Model
The second half of this course will study a number of additional topics, which will include
some of the following (depending on time):

• Trade and Inequality

• Wages and Oshoring

• Barriers to Trade and Trade Policy

• The Political Economy of Trade Policy

Each topic will have its own "Page" on Quercus, and all material that you need as a student
relating to that topic can be found on this page. This includes lecture slides, recorded
lectures, links to lecture quizzes and assignments, as well as additional reading material. I
will use "Pages" in Quercus as the main interface for the course, and you should always
check this section for any new material.

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For more detail, see the following section on "Grading Scheme".

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 Grading Scheme

Number % Each % Total

Lecture Quizzes 12 1% 10%
Assignments 6 5% 25%
Project 1 25% 25%
Final Exam 1 35% 35%
Participation 5%

Total 100%

Lecture Quizzes: In order to ensure you are following along, I will post a quiz following
each lecture of 10 multiple choice questions. This means a total of 12 quizzes throughout
the semester. Each week, there will be two quizzes (two lectures) and both quizzes will be
due at midnight on the Friday of that week. Only your 10 best assignments will count
towards your nal grade. There will be no exceptions or late penalties. Once the quizzes
close on Quercus you will receive a zero if the quiz is not completed.

Assignments: There will be 6 assignments in the rst ve weeks of this course. Four
of these will cover theory questions relating to, respectively, the Gravity Model, the Ricar-
dian Model, the Specic Factors Model, and the Hecksher-Ohlin Model. Two assignments
will relate to these models but will instead require statistical manipulation of data using R.
Only your ve best assignments will count towards your nal grade. Assignments
will always be posted on Wednesdays and will be due the following Wednesday evening at
midnight. There will be no assignments once the term project is assigned.

Project: The second half of the course will provide an opportunity to work on a term
project. This project will require nding trade data online and providing some statistical, as
well as written, analysis. All details will be provided later and this project does not require
any work from you until then.

Final Exam: The nal exam is worth 35% of your grade. It will be done online. Details
will come later in the semester.

Participation: Participation in this course mainly consists of a meeting between you and
me at some point during the middle of the semester. I will send out a google document with
a list of slots, and every student must sign up for a ve minute virtual meeting with me to
discuss your progress in the course, the pace, and your overall evaluation of the course at this
point. I understand this may be uncomfortable for some of you, but given that this course is
entirely online, I need some way of gauging how you are doing as a class. Once you attend
your ve minute meeting with me, you immediately get full marks for the "participation"
component of your grade.

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 Course Structure
Given that this course is delivered online, this section of the syllabus will provide a brief
overview as to how the course will function. All communication should be done through e-
mail, and I would appreciate if e-mails were sent directly to me, rather than to the TAs.

Lectures: Lectures will be given twice a week, from 10am-12pm, on Tuesdays and Thurs-
days. These will be done live using Blackboard Collaborate - a software available through
Quercus. Each levture will then be recorded and posted to the course website. All course
material relating to each topic will be accessible through the "Pages" tab in Quer-
cus. In order to ensure that you are following at the correct pace, there will be two lecture
quizzes due Friday at midnight each week. These are multiple choice and cover the basics of
what we covered in lecture.

Assignments: The rst half of this course will feature six assignments. Four assignments
will be theory, and they will be released on Wednesdays and due the following Wednesday
at midnight. These assignments will be done on your own, with the results submitted using
the Quercus online quiz. There is no time limit, but they must be nished by Wednesday
at midnight. There will be two additional empirical assignments that cover simple exercises
regarding nding data online and performing statistical analysis. These will be due every
second Wednesday.

Tutorials: Each Thursday, for the rst four weeks of the course, there will be a one hour
tutorial following the end of lecture. This tutorial will be held online and will cover practice
problems that I post on Quercus. I will additionally post the solutions to the practice problems
after each tutorial.
Oce Hours: Oce hours will be held virtually using Blackboard Collaborate. Exact
times will be given later.

I understand that the rst half of this course is quite heavy on work. You will have 8
quizzes and six assignments. However there is no midterm, and the second half of this course
will feature only a project and a nal exam.

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 Important Dates
All lectures will take place on Bb Collaborate between 10:00am and 12:00pm Eastern Standard
Time. Tutorials will be take place on Thursdays from 12:00pm to 1:00pm.
• Tuesday, May 5: Lecture (Introduction/Gravity Model)
• Thursday, May 7: Lecture (The Exchange Economy) + Tutorial (R, Regression, and
the Gravity Model)
• Sunday, May 10: Last day to register
• Tuesday, May 12: Lecture (Ricardian Model)
• Thursday, May 14: Lecture (Ricardian Model) + Tutorial (Ricardian Practice Prob-
lems)
• Monday, May 18: Victoria Day (university closed)
• Tuesday, May 19: Lecture (Specic Factors Model)
• Thursday, May 21: Lecture (Specic Factors Model) + Tutorial (Specic Factors
Practice Problems)
• Tuesday, May 26: Lecture (Hecksher-Ohlin Model)
• Thursday, May 28: Lecture (Hecksher-Ohlin) + Tutorial (Hecksher-Ohlin Practice
Problems)
• June 1, 2020 Last day to cancel courses
• Tuesday, June 2: Lecture (tbd)
• Thursday, June 4: Lecture (tbd)
• Tuesday, June 9: Lecture (tbd)
• Thursday, June 11: Lecture (tbd)
• Monday, June 15: Deadline to request late withdrawal / Classes end
• June 17 - 25: Final examination period

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 Online Courses/Technology Requirements
Naturally, this course will be entirely online due to the evolving Covid-19 situation. All
lectures will be run online at their scheduled time, but I will also record each lecture so that
those of you taking this course in dierent time zones can watch each lecture when necessary.
You must have access to a computer or a tablet with a Wi-Fi internet connection (or faster)
to be able to watch the videos. A headset and mic are required for webinar activities.
This course requires the use of computers, and of course sometimes things can go wrong
when using them. You are responsible for ensuring that you maintain regular backup copies
of your les, use antivirus software (if using your own computer), and schedule enough time
when completing an assignment to allow for delays due to technical diculties. Computer
viruses, crashed hard drives, broken printers, lost or corrupted les, incompatible le formats,
and similar mishaps are common issues when using technology, and are not acceptable grounds
for a deadline extension.

Academic Integrity
Academic integrity is essential to the pursuit of learning and scholarship in a university, and
to ensuring that a degree from the University of Toronto is a strong signal of each student's
individual academic achievement. As a result, the University treats cases of cheating and
plagiarism very seriously. The University of Toronto's Code of Behaviour on Academic Mat-
ters (www.governingcouncil.utoronto.ca/policies/behaveac.html) outlines the behaviours that
constitute academic dishonesty and the processes for addressing academic oences. Potential
oences include, but are not limited to:
In papers and assignments:
1. Using someone else's ideas or words without appropriate acknowledgement
2. Submitting your own work in more than one course without the permissions of the
instructor
3. Making up sources or facts
4. Obtaining or providing unauthorized assistance on any assignment
On tests and exams:
1. Using or possessing unauthorized aids
2. Looking at someone else's answers during an exam or test
3. Misrepresenting your identity
In academic work:
1. Falsifying institutional documents or grades
2. Falsifying or altering any documentation required by the University
All suspected cases of academic dishonesty will be investigated following procedures outlined
in the Code of Behaviour on Academic Matters. If you have questions or concerns about what
constitutes appropriate academic behaviour or appropriate research and citation methods, you
are expected to seek out additional information on academic integrity from your instructor or
from other institutional resources (see www.utoronto.ca/academicintegrity/resourcesforstudents.html).