A key course objective is to enlighten students about the workings of the international economy and its financial underpinnings. It aims to provide students with sufficient knowledge of the topic not only to make better business and investment decisions, but to understand and participate more fully in some of the key debates about international economic integration and policymaking, international relations and global financial stability
The course will introduce students to the main theories of international economics and finance, but will seek at all times to relate these theories to real-world developments. It will also seek to identify how the expansion of digitalization, and the global expansion of broadband internet access, might be affecting globalization.
Topic 1 Introduction and overview
Topic 2 Ricardian Model: comparative advantage and the benefits of free trade.
Topic 3 Income Distribution. Trades winners and losers.
Factor price equalisation global wage and interest rate convergence
Topic 4 The topics of standard trade analysis - terms of trade, export- and import-biased growth, international transfers of income, import tariffs and
export subsidies. International borrowing and lending as intertemporal trade
Topic 5 Economies of Scale: another reason why trade enriches. Clusters and infant industry promotion: an argument for trade protection.
Topic 6 The impact of digitalisation on trade in goods and services. Internet governance issues, digital protectionism
Topic 7 The Balance of Payments: global imbalances and global aggregate demand
Topic 8 Exchange Rates in the Short Run: the interest parity condition and the role of monetary policy
Topic 9 Exchange Rates in the Long Run: purchasing power parity (PPP) and the real exchange rate
Topic 10 Fixed Exchange Rates and Foreign Exchange Intervention - balance of payments crises.
The international Monetary System: the Gold Standard, the Bretton Woods system and the International Monetary Fund (IMF), the
European Monetary System (EMS) and the Euro. Optimum Currency Areas and the case for floating exchange rates
Topic 11 Financial Globalisation: the role of digital technologies
Topic 12 Project presentations
The course will follow broadly the structure set out in the textbook International Economics: Theory and Policy, by Paul Krugman and Maurice Obstfeld, but without going into the same level of detail. It will provide an overview of the main theories in the field, but maintaining a strong focus on trying to understand the functioning of the global trade and financial system. I will distribute lecture notes and regularly post reading material on the e-study.
Most of the readings will consist of newspaper or magazine articles, from sources such as the Financial Times or the Economist, which can shed light on the main international trade and financial issues in an accessible, user-friendly language. Students will be required to read and subsequently discuss these articles in class, familiarizing themselves with the main sources, language and current topics in international economics. Students will also participate in a group presentation on an international economics issue during the course.
Participation 15%
Mid-term 30%
Course project 25%
Final examination 30%
For a survey of the main theories of international economics, the main textbook of reference is:
Krugman, Paul and Obstfeld, Maurice, INTERNATIONAL ECONOMICS: THEORY AND POLICY. Pearson International Edition.