Permission of Instructor Required
This course investigates the following question: How should we design and analyze environmental policy in a globalized world where much economic activity and pollution crosses political borders?
Part one of the course (2.5 weeks) provides a short background in international economics. It includes lectures on models that can explain why countries produce and trade particular goods; it analyzes how market openness affects wages, prices, and other economic aggregates; and it describes the causes and consequences of trade policies. Part two of the course (2.5 weeks) provides a short background in environmental economics. It includes lectures on how environmental goods like clean air and climate affect consumers and firms; it analyzes how economic agents respond to environmental policies; and it describes tools that can help design and evaluate environmental policies.
Part three of the course (about 6 weeks) analyzes recent research on international environmental topics. Students will present and discuss academic research papers. This third section is divided into three topics: How does market openness affect the environment? How does openness interact with environmental regulation? Finally, how can international economics shed light on climate change? One class meeting will be held at the Yale farm and will discuss food miles and greenhouse gas emissions from agriculture and transportation.
Prerequisites: intermediate microeconomics and econometrics