69966 - International Economics (in Buenos Aires)

Learning outcomes

At the end of the course students are able to analyze several issues related to macroeconomic policy in open economies and to the evolution of foreign exchange markets. Specifically, students are exsposed to the determination and dynamics of exchange rates, on the choice between flexible and fixed exchange rates, with special attention to the European Monetary Union, on the international role of the euro and its relationship with the dollar and, finally, on speculative attacks on currencies and the design of a new international financial architecture.

Course contents

1. Globalization and its discontents

a) Key concepts and key facts

b) Opposite views

2. Cause and Consequences of International Trade

a) North-South Trade: The Comparative Advantage Theory

- The Ricardian Model

- The Specific Factors Model

- The Factor Proportions Model

b) North-North Trade: Economies of Scale and Imperfect Competition

3. Trade Policy

a) The Instruments of Trade Policies

b) The Political Economy of Trade Policies

4. International Factor Movements, Globalization, and Developing Countries

a) Foreign direct investment and migration

b) Offshoring, outsourcing, and licensing

c) Trade policy in developing countries

d) Controversies about the WTO and globalization (intellectual property rights, labor standards, trade and environment)

Readings/Bibliography

P. Krugman, M. Obstfeld, M. Melitz, "International Trade: Theory and Policy”, 10th Edition, Pearson, 2014.

R. Feenstra, A. Taylor, "International Economics", 3rd Edition, Macmillan, 2013.

Further Readings:

S. Barrett, “Environment and Statecraft”, Oxford University Press, Oxford, 2003. (chapters 3-4)

R. Freeman, "Are your Wages Set in Beijing?", Journal of Economic Perspectives 9(3), 15-32, 1995.

J..Markusen, J. Melvin, W. Kaempfer, K. Maskus , "International trade, Theory and Evidence", McGraw-Hill, 1995.

W. Martin, K. Maskus, "Core Labor Standards and Competitiveness: Implications for Global Trade Policy", Review of International Economics, 9(2), 317-328, 2001.

K. Maskus, "Intellectual Property Rights in the Global Economy", Institute for International Economics, 2000 (chapter 3).

K. Maskus, “The Role of Intellectual Property Rights in Encouraging Foreign Direct Investment and Technology Transfer”, Duke Journal of Comparative and International Law 9, pp. 109—161, 1998.

K. Maskus, “Should core labor standards be imposed through international trade policy?”, World Bank Policy Research Working Paper No. 1817, 1997.

G.B. Naveretti, A.J. Venables, et al., "Multinational Firms in the World Economy", Princeton University Press, 2006.

H. Nordstrom, S. Vaughan, "Trade and Environment: Special Studies 4", World Trade Organization Report, Geneva, 1999 (chapter 3).

P. Samuelson, "Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization", Journal of Economic Perspectives 18(3), 135-146, 2004.

P. Krugman, M. Obstfeld, " Study Guide" (solutions to exercises in the book and additional exercises)

Teaching methods

During the 60 teaching hours, respective arguments will be confronted in the order indicated in the program. After the presentation of the underlying theory behind the topic under study, the political economy applications of each and relevant exercises will be carried out. There will be presentations of current topics such as the exchange rate dilemma in Argentina, the US-China trade war, the new NAFTA, Brexit, the WTO, and the Paris climate accord.

Assessment methods

The exercises carried out during class will account for 20% of the final grade, the final presentation will account for 10% of the final grade, and the midterm and the final exam will account for 35% each.

Teaching tools

Lectures, exercises, and presentations.

Office hours

See the website of Alireza Jay Naghavi