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ECO 495: Graduate Research In Applied Economics (Associated with ECO 445: International Economic Analysis)
I. Introduction and Objectives of ECO 495
ECO 495 Graduate Research in Applied Economics is two-credit-hour course taken concurrently with a 400-level Economic course. Students are required to involve independent out-of-class work on a project designed in consultation with the instructor in the associate 400-level course. The objectives of the course are to learn how to conduct independent research projects in applied economics and how to develop the ability to write a high quality research paper. In this guideline we provide a number of suggestions on doing excellent research and writing effective papers.
To do the projects associated with ECO 445, students are expected to use the knowledge, understanding, and skills in international trade and investment to carry out independent research. The purpose of the exercise is to give you experience in conducting economic research and in communicating the results to others, both orally and in writing. The results of the papers are of secondary importance, and it is not expected to be a piece of publishable research. The papers serve as a test of your own scientific judgment, ability to evaluate the research of others, and skill in conducting independent research in international economies.
II. Course Requirements and Evaluations
The project may take you around 40 hours spread out during the semester. There are two main outputs to your project: a paper and an oral presentation. The oral presentation should last 15-20 minutes long. The oral presentation will be scheduled separately from ECO 445 class time.
You may choose any topics you wish for your paper, but they must be related to international trade and international investment. Your paper should involve one of the following: (1) Testing a hypothesis stemming from theories of international trade and investment through econometric methods, and (2) Assess a policy proposal or an argument of international trade and investment through econometric methods. The papers should be about 35 double-spaced pages, typed with 1-inch margin on all sides, and with the same format as those in academic journals (e.g., abstract, footnotes, citations, and references).
The following are deadlines for your project:
The late assignments will be penalized by reduction of 25% of total points for every day that the item is overdue.
Course grades are based on a total of 150 points, which are acquired as follows:
Paper Proposal = 30 points Oral Presentation = 20 points Paper = 100 points Total = 150 points
The scale for semester grades is as follows:
135 – 150 points = A (90% of total points) 120 – 134 points = B (80% of total points) 90 – 119 points = C (60% of total points) 75 – 89 points = D (50% of total points) 0 – 74 points = F
How Is Your Project Evaluated?Your research paper will be evaluated based on the following list of topics:
III. Proposals of Projects
An applied economic research work may include several items, such as choosing the topic, setting up the theoretical framework, constructing the econometric models, collecting data, running regressions, and finally writing your paper. The very first step is to outline the paper – a proposal. It is helpful for you to prepare a highly detailed outline accounting for each substantive comment in the paper, which may provide you with more confidence as you begin writing.
You are to write a 3-page (single-spaced) proposal with a detailed outline for your project. The proposal should include the following seven elements:
You may find following journals useful in preparing your proposals: The World Economy Journal of International Economics Economia Internazionale / International Economics Economic Development and Cultural Change Journal of Development Studies Journal of Development Economics European Economic ReviewWorld Development. American Economic Review Journal of Political EconomyQuarterly Journal of EconomicsReview of Economics and StatisticsJournal of Economic Perspectives
The major international trade/investment data and other relevant data may be found from: Direction of Trade Statistics Yearbook by International Monetary Fund (IMF) International Financial Statistical Yearbook by International Monetary Fund (IMF) International Trade Statistics Yearbook by United Nations (UN) World Investment Report by United Nations (UN) World Development Indicators CD ROM (various years) by World Bank. World Development Report (various years) by World Bank.
Useful links on international trade and investment · The World Trade Organization · U.S. Census Bureau Trade Statistics · Penn World Tables (Macroeconomic data on 152 countries and 30 subjects) · Sources of Trade Information · Canadian Department of Foreign Affairs and International Trade · International Trade Law (Cornell) · The Trade Zone (Information on international trade) · International Trade Information by U.S. Government · International Trade Commission · Trade Policy and Global Environmental Change · Trade Resources Page at Yale · Academic Consortium on International Trade Possible Topics of Projects
The following list is for your reference only. You are not limited to it. You may pick up any topics you wish as long as they are related to international trade and investment. · Gains from Trade
Why countries gain from international trade? Why not everybody supports free trade? Terms of trade and gains from trade How do exports affect a country’s economy? How do imports affect a country’s economy? Trade and technology in a developing country Effects of international trade on domestic income distribution Domestic winners and losers in international trade Trade and wage-gap between skilled and unskilled labor in the U.S. (or any other countries) Productivity and competitiveness of U.S. in international trade Is the pauper labor argument valid? Why should the US have free trade with Mexico (or other developing countries)? Does trade exploit low-wage countries?
· The Pattern of Trade
Trade pattern between developed and developing countries (e.g., the U.S. and China) Trade pattern between developed countries (e.g., the U.S. and Japan or European Union (EU)) Trade pattern between any two countries Trade pattern of a particular country (e.g., the U.S., China, Iran, or Mexico) Changes in trade patterns of the U.S. (or other countries) over time (e.g., 1950-2000) Changes in technology and trade patterns in the U.S. (or other countries) Changes in factors of production and trade patterns in the U.S. (or Iran, or Mexico) Interindustry and intraindustry trade in the U.S. or China (or other specific countries) Comparisons of trade patterns in Latin America and East Asia Comparisons of trade patterns in the US and Japan Terms of trade (TOT) and patterns of trade Terms of trade in developing countries Terms of trade in developed countries · Trade Policy, Economic Development and Growth
Why do countries use tariffs and quartos to control trade? Costs and benefits of tariffs Dynamic analysis of protectionism in developing countries Economic development and protectionism Arguments for free trade: An analysis of political economy National welfare and free trade Income distribution and trade policy Exports and economic growth in developing countries Export-orientation strategy and economic development in developing countries Openness and economic growth in developing countries Globalization and developing countries Globalization and developed countries Trade policy and development: Export-orientation and import substitution Do countries compete in international trade? Do countries compete for good jobs in international trade? Competing for high-technology industries in international trade Strategic trade policy in the U.S. (or other countries) Preferential trade areas (such as NAFTA, APEC free trade areas, and EU) World Trade Organization (WTO) and trade policies WTO and developing countries WTO and industrialized countries
· Foreign Direct Investment (FDI) and Multinational Firms
Inward flows of FDI in a country (e.g., the U.S. or China) Outward FDI flows in a country (e.g., the US, Japan, or EU) Determinants of inward FDI distributions among countries (or a group of countries, e.g., developing countries or African countries) Vertical FDI and its determinants Horizontal FDI and its determinants FDI and export-processing zones in developing countries FDI and exports in FDI-source countries FDI and exports in FDI-host countries FDI and economic growth in developing countries FDI, spillover, and technology in a developing country FDI policy in developing countries FDI policy in developed countries FDI and global income inequality FDI and income distribution within a host country FDI strategy in FDI-source countries FDI strategy in FDI-host countries
IV. Paper Writing
There is wide variation in the way research papers are organized. Table 1 provides one example of the way a research paper might be organized, although other structures are possible.
Table 1 An Example of the Major Sections of an Applied Economic Paper
Style of writing is vitally important. Vigorous writing should be concise: a sentence should contain no unnecessary words and a paragraph no unnecessary sentences. This does not require that you make all sentences short, or treat your subject only in outline without all detail. You should have every word tell. Writing should be definite, bold, and assertive; it should not be hesitating, tame, or noncommittal. Effective writing also requires that you should use active and passive voices whenever possible, use proper tenses, and structure sentences and paragraphs.
Two valuable books on the mechanics of writing are as follows: University of Chicago, A Manual of Style, Chicago: The University of Chicago Press, 1969. Strunk, W. and E. B. White, The Elements of Style, 3rd Edition, New York: Macmillan Publishing Co., 1979.
Abstract: The abstract is in many ways the most important. People usually read the abstract first, and many people will read the abstract than will read the entire paper. The abstract is a concise statement of the essential information in the paper, in which you should provide the most import results and their significance. You may write your abstract after the rest of the paper is completed.
Introduction: Your introduction may include three elements: motivations for your study, literature review, and research objectives. You should indicate the specific problems of interest, and present the reasons of why you bother about the issue. You need to present a review of the literature as a foundation for the current research. If your manuscript is somewhat lengthy, a separate literature review section may be warranted, or you may wish to incorporate a brief review into the introduction. This will ensure that the significance of your findings is not eclipsed. Be sure to link any previous work cited to your research; the reader should not have to guess why you included a particular citation. The research objectives should follow naturally from earlier statements. If you paper introduces a problem and discusses previously published work that makes progress toward a solution, the objectives of the current work might involve moving closer to that solution. If your paper fills a critical gap in the literature, be sure that the specific objectives are apparent to the readers.
Background of Issues: For many applied economic paper, a separate section for the background of issues is necessary to provide the readers with basic information of the issues. The information is also helpful to your interpreting empirical results in the following sections. For example, you are working on the topic of economic growth impact of exports in China since 1979 when China adopted the open-door policy. You may tell a story, through tables and figures, about how China’s exports influence economic growth. You may emphasize the channels through which exports may stimulate economic growth, such as higher input productivity in the export sector due to better allocation of recourses, larger economies of scale due to an enlargement of the effective market size, greater capacity utilization, and more rapid technological changes.
Theoretical Framework: It is necessary for you to set up a theoretical framework because your empirical analysis will be conducted based on the framework. You may derive the framework largely from what you have learned in class, in addition to the literature. The theory of international trade and investment that we have discussed in class would be enough for most of you to prepare the framework. The presentation of this section may take the form of verbal descriptions or mathematic treatments, or both. You should emphasize theoretical arguments that are most directly relevant to the econometric modeling in the following section.
Empirical Analyses: This part consists of five elements: specifying econometric models, defining variables in the models, describing data, reporting estimation results, and interpreting the results. The econometric models may be derived on the basis of the theoretical framework in the previous section. The final outcome should take in the reduced form of equations ready for regressions. You should define explicitly each of variables in the models and discuss the possible impact of independent variables on the dependent variable in each equation (i.e., you need to indicate positive or negative signs for each independent variable, if possible). Data sources for each variable should be clearly stated, and constructions of an index should be explained explicitly as well.
Usually the estimation results are reported in tables with a standard format, which you may find out from journal articles of empirical studies. You should also follow the standard method to discuss and interpret the estimation results. An inadequate interpretation is one of the most comment reasons for a low quality paper. In some cases, there is a fatal flaw: the results are simply not significant enough to warrant conclusions. You may go back to your econometrics textbooks for references.
Concluding Remarks: Students often confuse the difference between the Conclusions and a Summary. Conclusions are defined as the last part of a chain of reasoning, the opinion formed after investigation or thought. The conclusions are thus an outcome of the work, an extension of the results and discussion. In contrast, a summary is a brief statement covering the substance or main points of the entire paper. For a research paper, either a conclusions section or a summary, or both, are acceptable.
For the section of concluding remarks, you may include three aspects: a summary of main points in your work, the policy implication of your conclusions, and limitations of your work and future directions of research in the topic.
References, Footnotes, and Citations: A research paper should include references, footnotes, and citations to previous work upon which the current research is built. Each idea or piece of data that is not your own must be referenced, unless the idea is common knowledge not attributable to a single source (e.g., the law of demand). To do less may be involved plagiarism, which will result in a zero for the project and University disciplinary action.
There are many instances when you have the option to include a citation that may be marginally relevant. Since too many references can be as annoying as too few, the best guide is to look through published journal articles with a similar emphasis. The typical journal article may have as few as 3-5 references or it may have 50 or more. Depending on the emphasis of the literature review and the amount of detail in the overall paper. It is required that you should include at least 15 references in total in your projects. The format of references of journal articles, books, and book-chapters are suggested respectively as follows:
Romer, Paul (1986), “Increasing Returns and Long-Run Growth,” Journal of Political Economy, Vol. 94, No. 5, pp. 1002-1037.
Barro, Robert, and Xavier Sala-i-Martin (1995), Economic Growth, Cambridge: MIT Press.
Rodrik, Dani (1995), “Trade and industrial policy reform,” in J. Behrman and T. N. Srinivasan eds., Handbook of Development Economics, Amsterdam: Elsevier Science B.V., pp. 2925-82.
You are suggested to use footnotes (not endnotes) for the additional information that would take too much space in the main text of the paper or would interrupt the flow of reading the paper.
Appendices: Appendices should be used for information that would occupy too much space in the main body of the paper or would interrupt the flow of reading the paper, but should be available as reference material. Examples of appendices include calculations, lists of data, definitions of terms and symbols, computer programs, or detailed explanations. An appendix should include only material that is relevant to the theme of the paper, not for material of marginal interest. V. Oral Presentation
You are expected to do a formal oral presentation of your project. The presentation is open to everybody, and usually the Economics Department Chairperson and the Director of Graduate Studies are supposed to be audiences, in addition to your classmates and instructor. The format of the oral presentation is as follows: (1) Each presentation should take 15-20 minutes, and 5-8 minutes for questions and comments from audiences; (2) Each presenter should use overheads with 2-4 pages of transparency, and the fond size of the transparency should be no smaller than 18; (3) Each presenter’s dress should be formal.
The oral presentation is evaluated based on the following items.
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