1. Using data from the two countries, plot openness versus Industrial Pay Inequality(from UTIP-UNIDO) for each nation in one graph. IT?S UP TO YOU TOFIGURE OUT HOW TO DO THIS. (8 marks)

2. Using data from the two countries, calculate the correlation (using excel) betweenopenness and Industrial Pay Inequality (from UTIP-UNIDO) for each nation,respectively. Report and interpret this relationship in up to 200 words. [Hint: TheTheil Index is used as a proxy for the ratio of skilled to unskilled wages inempirical studies]. DO NOT ATTACH YOUR DATA TO THEASSIGNMENT. (10 marks)

3. Explain in up to 400 words whether your data agrees or disagrees with theStolper-Samuelson Theorem. (Remember to accurately define the theorem). (7marks).

INTERNATIONAL TRADE (ECON 1086- RMIT, Australia) (ECON 1269- RMIT, Vietnam) (ECON 1089- SIM, Singapore) ASSIGNMENT 2 PLEASE CHECK RMIT/SIM BLACBOARD FOR RELEVANT DUE DATE; IT IS UP TO YOU TO FIND THIS OUT. Instructions for submission: 1. Click on Assessment tasks in BlackBoard. 2. Click on Assignment 2. This is in red. 3. Scroll down to Assignment Submission. 4. Attach your file by clicking on \"Browse My Computer\". To answer the assignment questions first get the data follow these steps. 1. This assignment requires you to obtain data from two (2) countries of your choosing over the period 1985-2005. 2. Obtain country-level data on imports of goods and services, exports of goods and services, and GDP from the World Bank's World Development Indicators (http://databank.worldbank.org/data/reports.aspx?source=world-developmentindicators). 3. Use data measured in real terms. It is up to you to figure out what data is measured in real terms and which one is nominal. 4. Obtain data on industrial pay inequality difference from UTIP-UNIDO (http://utip.gov.utexas.edu/data.html). 5. Merge the data using Excel. It is up to you to figure out how to do this! 6. DO NOT attach Excel files to the assignment. International Trade Assignment 2 Page 1 Assignment 2 (25% of your final grade) Check BLACKBOARD for due dates. *** Follow the instructions above on how to get the data. *** See Chapter 6 for references. 1. Using data from the two countries, plot openness versus Industrial Pay Inequality (from UTIP-UNIDO) for each nation in one graph. IT'S UP TO YOU TO FIGURE OUT HOW TO DO THIS. (8 marks) 2. Using data from the two countries, calculate the correlation (using excel) between openness and Industrial Pay Inequality (from UTIP-UNIDO) for each nation, respectively. Report and interpret this relationship in up to 200 words. [Hint: The Theil Index is used as a proxy for the ratio of skilled to unskilled wages in empirical studies]. DO NOT ATTACH YOUR DATA TO THE ASSIGNMENT. (10 marks) 3. Explain in up to 400 words whether your data agrees or disagrees with the Stolper-Samuelson Theorem. (Remember to accurately define the theorem). (7 marks). International Trade Assignment 2 Page 2 Econ1089 International trade Assignment 2 Guidelines This is strictly for the use of students in my lecture groups Do not include the raw data of the countries in your answer or the appendix Label the question else it will be treated all as Q1 Start each question on a new page Do not use excessive abbreviations. Perform a spell check Check you answer each part of the question Key guideline s You may bold or underline your answer Note the word count and you may exceed by maximum 50 words Refer to the SIM guidelines on submission ; make sure you name your file correctly using the given format. Submission time is Singapore time 7pm (not 12 midnight) Whilst multiple submission is allowed, excessive submission will put you in a bad spot I do not address any issues on late , incorrect submission. They will be handled by RMIT. Unless the grade is a significant difference, else I do not entertain disputes over grading over 1 to 2 marks Show using ONE diagram for EACH COUNTRY, plot the openness vs. industrial pay inequality over the stated period graph of Make sure the diagram is properly labelled . Ensure each diagram takes up at least HALF of the page Question requireme nt Q1 Describe the trend a) for each country : upward? Downward? Any outliers? b) Compare the two countries: constant gap? DO NOT GIVE THE REASONS FOR THE TRENDS. DON'T EVEN TRY! This is a fairly easy question so aim to score close to full marks Excessive answers can cause you to lose marks. Point to note: Openness in assignment is measured as [Export value+ import value ]/ GDP [all measured in US$, at constant 2010 prices] 1) Present clearly for each country Question Requireme nt Q2 For country ______, the correlation between openness and industrial pay inequality is ______ Values presented in 2 decimal places; and the signs of correlation accurately presented 2) Interpret the data fro each country : Question Requireme nt Q2 For country ______, when openness rise by 10% , industrial pay inequality *improves/worsens by _____%, suggesting the wage gap between the skilled and unskilled workers have *widenarrowed 3) Additional pointers Compare the size of the correlation if both figures carry the same sign and discuss the implications DO NOT GIVE THE CAUSES 1) Explain clearly SS-theorem for each of the country For country _____ with relative more abundant *skilled/unskilled labour (cite appropriate evidence) will produce relatively more *manufacturing / agriculture goods (cite evidence) ; With trade, the price of the good in the exporting sector (*agriculture / manufacturing) *rises/falls and this will benefit the abundant factor ie *skilled/unskilled labour Question Requireme nt Q3 Thus SS theorem predicts for this country, inequality will *worsen/improves income Important note: 1. The two countries may not be trading with each other extensively so no need to do detailed research on the goods& service traded btw them. 2. DO NOT include any diagram as focus is not on HO or the detailed analysis of ss- theorem 2) Comparing to the data presented in Q2 to discuss the SS theorem is valid for each country Question Requireme nt Q3 For country ___, the correlation data shows income inequality improves/worsens and this is* agrees/disagrees with the SS theorem 3) An excellent answer [ to score >22/25] will consider the validity of ss-theorem. There are a lot of debates of SS theorem irrelevant to the modern world . Question Requireme nt Q3 Recall your analysis of SS and note the assumptions made : 2 countries, 2 goods, distinctive factor abundance and factor intensity , wages determined in perfect market FOCUS only on ONE country and one FACTOR that explains why ss theorem application is not appropriate Check the pointers discussed in lecture slides and apply the relevant accordingly one to the country concerned or do a research on this aspect[ see useful links in next slide] Useful resources Some links or articles to consider ; but be sure to read them if you wish to adopt their arguments to the country of your choice and not copy and paste their discussions not relating to the country Question Requireme nt Q3 https://www.washingtonpost.com/opinions/charle s-lane-us-benefits-from-trade-deals--never-min d-the-protectionists-hype/2014/02/03/8d374f208ceb-11e3-833c-33098f9e5267_story.html?utm_ter m=. 868475bead38 http://rodrik.typepad.com/dani_rodriks_weblog/20 08/06/stolper-samuelson-for-the-realworld.html http://www.economist.comews/economics-brief/ 21703350-third-our-series-looks-stolper-samuel 1) Can I use a different set of countries from my assignment 1 : Yes but make sure you re-compute the openness data Common FAQ 2) Since there are more discussions on USA , can I switch to replace my developed economy to USA? See Q1 3) I cant find data to discuss ratio of the two goods and the ratio of supply of skilled and unskilled labour ; Can I generate my own numbers as seen in the lecture slides ? There will not be such data available To determine if the economy is endowed with more one can check on the literacy rate reconsider skilled these labour, pairs of countries: and/or years of formal schooling Should Sg -Msia; South Korea - Jpn; HK-SG; or countries with To determine the key exporting sector , check the Set your goals and the end in mind Pass (51) Credit (62) D (71) HD (81) Assignme nt 1: 18/25 Assignme nt 1: 18/25 Assignme nt 1: 20/25 Assignme nt 1: 22/25 Assignme nt 2: 18/25 Assignme nt 2: 20/25 Assignme nt 2: 20/25 Assignme nt 2: 22/25 Exam : 15/50 Exam : 24/50 Exam : 31/50 Exam : 37/50