Covers the basic general equilibrium models of trade and partial equilibrium models of trade policy. General equilibrium models will be used to highlight the concepts of comparative advantage and the gains from trade, the four main reasons for trade (technology differences, factor endowments, differences in preferences, and scale economies), and important general equilibrium concepts such as Lerner symmetry and theory of distortions. A number of topics commonly covered in liberal arts trade courses (e.g., offer curves) are of limited practical value and will not be covered. Partial equilibrium models will be used to explain the economic impact of border interventions.
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