Excel Models for International Trade Theory and Policy: An Online Resource

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Journal/Book Title/Conference

Journal of Economic Education



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Numerical simulation models that have been built in the software Excel are well established as a device with several pedagogical advantages, in particular the ability to combine flexible numerical examples with graphics in an environment that is almost universally familiar and available. International trade theory, with its emphasis on general equilibrium and its myriad of intricate geometric expositions, is particularly well-suited to Excel-based modeling. This Web site provides a resource for instructors of international trade wishing to incorporate Excel-based numerical simulations into the classroom. It brings together a number of simulation models dealing with key aspects of international trade theory and policy. Areas covered include specific factors, factor proportions, general equilibrium analysis of trade and industrial policy, trade disputes, and preferential trading agreements. Some of the models have been previously described elsewhere, and the site makes the Excel sheets, along with extended exercises, more easily accessible. Other models are completely new. These include several configurations of the specific factors model, a live version of the factor-proportions model that does not require the Solver add-in and provides instant feedback, and a live general equilibrium model dealing with the theory of commercial policy. The latter incorporates the standard general and partial equilibrium geometry, linking the general equilibrium approach to positive theory and the partial approach to trade policy in most textbooks. These new Excel sheets also are made fully available with instructions, exercises, and explanations thereof. Finally, we have provided information on how models like these can be used, sample assignments, details on construction, and references to key results. Like others, we have found numerical simulations in Excel to be a very useful tool in the undergraduate international trade classroom. The models have helped to make a number of challenging topics, such as immiserizing growth, accessible to undergraduates. We hope the site will encourage instructors to try the resources.

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