Taught In English

There is no language prerequisite for courses at this language level.

Number of sessions: 30
Length of each session: 1,5 h
Total length of the module: 45 hours

INTRODUCTION TO THE COURSE
International economics is divided into two broad subfields: international trade and
international money. International trade focuses on transactions that involve a physical
movement of goods - real transactions. On the other hand, international money focuses
on financial transactions and refers to the monetary side of the international economy.
This course deals with the first aspect of international economics, i.e. the real
transactions and focuses on two main aspects of it: international trade theory and
evidence and international trade policy.

CONTENTS
Part I: International trade theory and evidence
1 World trade: an overview
1.1 What is international economics about?
1.2 Who trades with whom?
1.3 The changing pattern of world trade.
2 Labour productivity and comparative advantage: the Ricardian model
2.1 The concept of comparative advantage.
2.2 Trade in a world with one productive factor.
2.3 Misconceptions about comparative advantage.
2.4 Comparative advantage with many goods.
2.5 Empirical evidence.
3 Resources, comparative advantage, and income distribution
3.1 Model of an economy with two productive factors.
3.2 Effects of international trade in economies with two productive factors.
3.3 Empirical evidence.
4 The standard trade model
4.1 A standard model of a trading economy.
4.2 Relative supply and demand.
4.3 Effects of economic growth.
4.4 Empirical evidence.
5 International factor movements
5.1 International mobility of labour.
5.2 International mobility of capital.
5.3 Empirical evidence.
Part II: International trade policy
6 The instruments of trade policy
6.1 Tariffs.
6.2 Import quotas.
6.3 Export subsidies.
6.4 Empirical evidence.
7 The political economy of trade policy
7.1 Arguments in favour of free trade.
7.2 Arguments against free trade.
7.3 Empirical evidence.

GRADING
Mid-term exam (30%): to be written in class. The exam will consist on five true or
false questions and 5 multiple-choice questions on the material from the lectures and
readings (book chapters).
Homework (20%): to be done individually. During the course there will be two
assignments (no more than 2 pages) about some of the topics discussed in class.
Final Exam (50%): to be written in class. The exam will consist on five true or false
questions and 5 multiple-choice questions on the material from the lectures and readings
(book chapters).

BIBLIOGRAPHY
International Economics: Theory and Policy (7th edition), Paul R. Krugman and
Maurice Obstfeld.