January 2010 President Obama announced prominently in his State of the Union address that he wanted to 'double US exports in the coming 5 years." I don't know of many economists who held their breath. There are many nails littering the road to doubling exports, here is now reported by the New York Times (Seattle Times). The Large Open Economy issue is very much in play for the US (see Chapter 14)…

Here are some alternative titles:

One Equation Economics vs. Two Equation Economics

Or:

Write your op-ed about the area in which you received your Nobel prize…

Read Michael Spence, January 5, 2007,  We are all in it together".

1)     Why did Spence receive the Nobel prize?

2)     Outline why Spence thinks an appreciation of the yuan would not help the US trade deficit.

Read Joseph Stiglitz, April 6, 2010, “No Time for a Trade War.”

1)     Why did Stiglitz receive the Nobel prize?

2)     Outline why Stiglitz thinks that the appreciation of the Yuan will not help the US trade deficit.

3)     Relate his key argument (involving savings) to Nicholas Kristof’s Joe Sixpack 

4)     How do the Stiglitz andSpence stories differ?

Read Paul Krugman, April 7, 2010 "More on the Exchange Rate and the Trade Balance" 

5)      Why did Krugman receive the Nobel prize?

6)      Why is the Chinese appreciation actually going to help the trade balance, according to Krugman? Use your own words.

7)      What is the difference between one and two equation economics that Krugman refers to, and how does itrelate to Krugman’s graph?