Global Exchange and International trade

Problem set one


Instructions: Please answer all the questions below. I expect typewritten answers. Succinct answers and complete sentences are preferred. The problem set is due Monday, September 21th, at 4pm on Moodle.1 1. Pick a traded good, exchange facilitating variable (such as transportation), an empire, or

a diaspora. Use your reading of Bernstein and any additional historical sources to construct a timeline or a spatial map to tell a historically accurate story. For a timeline, you can use Timeline JS and for maps, you can use StoryMaps JS. A good example of a timeline is “A History of Wine Around the World”. For Open Education graphics and videos, try to use these resources. (50 points)

2. Read the article, “The Impact of Trade on Inequality in Developing Countries” by Nina Pavcnik.

a. Summarize the main points from section IV, V and VI. (10 points) b. Pick 2 low-income countries and 2 middle-income countries. Obtain data on

wage-inequality in these countries over time. Three-to-five-period data points with gaps should suffice to see a trend. (5 points)

c. Explain what you see in these data from a theoretical perspective? For example, explain if and how the results are consistent with Ricardo’s theory of comparative advantage or with Kremer and Maskin’s theory of worker matching or some other similar trade theory. (10 points)

3. Does free trade affect the acquisition of human capital and schooling?2 (25 points) 4. Bonus: Do questions 1-5 in Krugman, Obstfeld and Melitz page 49. (10 points)

1For each question, I expect typewritten answers and digitally created graphs. Include a complete list of references.

You should use the APA style manual for references. To ensure correct citations please seek help from the Writing

Center or me. I encourage you to seek help from the Writing Center anyways because the quality of writing is just as

important as the content of your argument. I prefer journal articles and working papers from reputable sources. Failure

to cite your work correctly and follow these suggestions will result in an overall 10 point deduction.

2 Your answer cannot exceed 800 words and must be at least 700 words in length.

Problem set one: Economics 251: Global Exchange and International trade


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