25751 - International Economics

Course Unit Page

Academic Year 2021/2022

Learning outcomes

The course is aimed at providing students that did not take International Economics in the First-cycle degree/Bachelor with some basic theoretical tools. In the part of the course devoted to international trade the focus is on what are the reasons explaining trade patterns among countries and what are the gains from trade. The most important instruments of trade policy are analyzed, and the costs and benefits of protectionist trade policies are assessed. Moreover, multinational enterprises organizational and production choices are explained, in order to understand their functioning. In the part of the course devoted to international monetary economics, the focus is on the mechanisms that determine the exchange rate between currencies, and on the relationship between exchange rates, money supply and interest rates

Course contents

The course is organized in blended learning. The number of students allowed in class will be determined both on the basis of class capacity and by the health and safety provisions that deal with the pandemic emergency. In case more students want to attend classes in presence than permitted by the rules, a system of shifts will be organized so to allow students to participate. Regardless of the health-related conditions and the specific organization of the course, students will be able to follow the lessons of the entire course remotely on MS TEAMS.

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 is organized in topics, including, among others, open macroeconomics, optimum currency areas, the European Union and the Euro experience, the historical and recent migration waves.

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)

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)


D. Salvatore (2012), Introduction to International Economics. 3rd Edition (4th Edition, 2019, as soon as available).

P. Krugman, M. Obstfeld and M. Melitz (2018), International Economics: Theory and Politics. 11th Edition.

The course will be mostly based on Salvatore's textbook, which is easier and particularly recommended for students with a weaker background in economics. Students who already attended micro and macroeconomic courses and who look for a deeper analytical elaboration may find it useful to study 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.

Additional readings from the instructor may be assigned.

Teaching methods

Frontal lessons and group discussions. Student's active class participation is encouraged.

This class will be offered in blended learning. The online part will be offered via the Microsoft Teams platform. Students attending the lectures online are strongly advised to use a wired connection, because it is more stable than a WiFi one.

Assessment methods

This written exam will consist of 10 multiple choice questions and 2 open questions.

The mode of the exams (face-to-face or online) will depend upon the evolution of the COVID-19 pandemic in Italy. In any case, calculators will be allowed, while any use of cell phones will be strictly forbidden.

Students taking the exam online must have installed ZOOM on their PC and must access the virtual exam classroom using the link they will receive by mail and connect to the exam on EOL (https://eol.unibo.it/).

Any form of academic dishonesty will not be tolerated.

To take the exam, you are required to enroll on Almaesami. Class attendance is strongly recommended to improve the productivity of the time spent studying this subject.

The student has the right to refuse the passing grade obtained only once.

Teaching tools

Blackboard, slides and touch screen.

Office hours

See the website of Luciano Messori