5115 - INTERNATIONAL ECONOMICS (REAL AND MONETARY)

The first part of the course provides the tools necessary for an analysis of the determinants, patterns and effects of international trade and of government trade policies. The second part builds on the concepts of macroeconomics, to provide students with a deep understanding of the macroeconomic functioning of a system which is "open" and integrated with the rest of the world. Special emphasis is devoted to the discussion of international monetary and financial policies, including the strategy and the organisation of the European System of Central Banks, also in view of the newly enlarged European Union.

International Trade Theory

•  Labor productivity and comparative advantage: the Ricardian model.
•  Immobile factors and income distribution.
•  Resources and trade: the Heckscher-Ohlin model.
•  Economies of scale and international trade.
•  Monopolistic competition and trade.
•  International labor mobility.
•  International borrowing and lending.
•  Direct foreign investment and multinational firms.
•  The instruments of trade policy.
•  The political economy of trade policy.
•  International negotiations and trade policy.

•  Trade policy in developing countries.

International Monetary Economics

• Exchange rate regimes, the balance of payments, purchasing power parity and interest rate parities. Measuring capital mobility and financial integration.
• IS-LM macroeconomics and the exchange rate without capital mobility.
• The flex-price monetary model. 
• Asset markets and the exchange rate: the Dornbusch and portfolio models.
• The history of the International Monetary System: the gold standar, Bretton-Woods, the floating exchange rates in the seventies, the EMS and the euro.
• The European system of Central Banks: institutional organisation, policy strategy, instruments and performance.
• The international role of the euro.
• Facts and issues in European financial integration.

Written exam.
Students may take the exam in two written parts: a 1st partial exam and a 2nd partial exam to be taken within the end of the summer session. In this case the total mark will be the average of the marks of the 1st partial and the 2nd partial.

First part

• P. KRUGMAN, M. OBSTFELD,  International Economics: Theory and Policy, Scott, Foresman and Company, 2000, 5^th ed. (chapters 1-11).

Second Part

• F. BRUNI, Lectures in International Monetary Economics (material available on the web site).
• European Central Bank, The Monetary Policy of the ECB, Frankfurt, 2004.

For further and continuously updated information consult the  IEP web site or contact  S.I.D.  - Servizio Informazioni Didattica - Institute of Economics - via Gobbi, 5 - Room 313.