78980 - International Economics (Advanced)

Learning outcomes

The course aims to give students a better understanding of causes and consequences of international trade and of the effects of trade policies; of the main approaches to international factor movements, organization of firms, and debates on globalization; of exchange rates and international capital markets; of the complex issues raised by the economic interdependence of nations

Course contents

Why do countries trade? What are the consequences of introducing a tariff on import? Why did the EU adopt a single currency? How to make sense of Brexit and Trump’s protectionism? This course aims at addressing these issues and many other relevant topics in both international trade and open economy macroeconomics. At the end of the course, students will have a sound foundation in international economics and they will be able to critically evaluate both micro and macro trade patterns, as well as policy issues.

The first module introduces the most important theories of international trade and their predictions for consumers, firms, and governments. In particular, it addresses issues such as determinants of trade flows, gains from trade, and motivation and consequences of protectionist policies. It also covers real-world areas of international trade, such as the EU, the Americas, and Asia.

The second module aims at providing a solid understanding of the basic functioning of a macroeconomic policy in an open economy regime, the reasons behind the creation of a common currency among different countries, and the relationship between financial, monetary and real markets. There will also be room for a focus on some recent episodes of financial and economic crisis all around the world.

 

Analytical content

 

Trade theory and policy (Paolo Vanin)

Introduction (S 1; KOM 1,2)

Comparative advantage, technology and Ricardian model (S 2, KOM 3)

Factor proportions and Heckscher-Ohlin model (S 3,4; KOM 4,5,6)

Economies of scale and new trade theory (S 4; KOM 7,8)

Trade policy and politics (S 5,6; KOM 9,10)

Integration, development and factor movements (S 7,8,9; KOM 10,11,12)

Topics in international finance (Luciano Messori)

Balance of payment and exchange rate (S 10,11; KOM 13,14)

Optimum currency areas and European integration (S 15; KOM 20)

Globalization and financial crises (S 16; KOM 21, 22)

Readings/Bibliography

Salvatore (2012), Introduction to International Economics. 3^rd Edition.

Krugman, Obstfeld and Melitz (2015), International Economics: Theory and Politics. 10^th Edition.

Students with a weaker background in economics may find it convenient to complement classes with Salvatore’s textbook, which is easier. Students who already attended micro and macroeconomic courses may find it more useful to use Krugman, Obstfeld and Melitz’ textbook, which is more formalized.

In the analytical content (see above) the two handbooks are referred to by the authors' initials, S and KOM, followed by the corresponding chapter number.

Teaching methods

The course will be taught using a combination of lectures, classroom discussions, and students’ presentations. The first module (30 hours) will be taught by Paolo Vanin, the second one (10 hours) by Luciano Messori.

Assessment methods

For attending students sustaining the exam within February, the final grade will be based for a 1/3 on students' presentations and class participation, and by 2/3 on a written exam consisting of 10 multiple choice questions and 4 open questions.

For non-attending students, and for all students in exam sessions after February, the grade will be entirely determined be the written exam.

Teaching tools

Slides and articles will be made available on AMS Campus before class.

Office hours

See the website of Paolo Vanin

See the website of Luciano Messori