30057 - INTERNATIONAL ECONOMICS
BIEF - CLEAM - BIEM
Course taught in English
Has globalization been good or bad for European economies? Should the European Union and Usa sign the TTIP free trade agreement? How is the Euro-Dollar exchange rate determined, and what can the ECB do about it?
These questions are important for policymakers as well as for interested citizens. International Economics provides no simple answers to these questions, but a framework to think about them.The course aims to give students an overview of this framework and show them how it can help to understand a little better the world we live in.
The course is divided in two parts. The first part (roughly two thirds of the course) deals with the theory of international trade: why do countries exchange goods? Which goods do they exchange? How do firms decide to internationalize and offshore, and what consequences does this have for them and their workers?The second part deals introduces some basic elements of international finance, covering the balance of payments, exchange rates and international capital flows.
Part I: International Trade
- World trade since the Industrial Revolution.
- The institutions of World Trade: GATT, WTO and Regional Trade Agreements.
- Trade due to production factor differences: the Hecksher-Ohlin model.
- Trade due to increasing returns: Krugman and Helpman's New Trade Theory.
- "New New Trade Theory": the role of heterogeneous firms.
- Multinational firms and Offshoring.
Part II: International Finance
- The balance of payments.
- How are exchange rates determined?
- international capital flows.
There will be several problem sets. Problems sets can be done in groups of up to three students, and will not be graded. However, handing in very incomplete problems sets (no attempt at solving the questions or extremeley short and sloppy answers) will result in point deductions on the final exam.
The grade for the class will be based upon a final exam, consistings of several short questions on the material covered in class, and an exercise similar in style to the problem sets.
- P. Krugman , M. Obstfeld , M. Melitz , "International Economics", 2014, 10th Global Edition .
The course is divided into two sections. The first section analyses current monetary and exchange rate policies, discussing the Global Crisis and its drivers, with specific attention to the US, Europe and Asia, in order to explain the Great Recession and highlight which are the present macroeconomic problems to be addressed and fixed.
The second section deals with international trade.
Monetary and Financial Economics:
- Introduction: monetary Policy, Exchange Rates and Financial Regulation before and after the Crisis.
The Global Financial Crisis: discovering its Drivers.
The Great Moderation: Efficient Markets, National Policies and International Harmonization.
The Great Deviation: Monetary Policy, Financial Deregulation and External Unbalances.
The Great Recession: how to deal with?
Labor productivity and comparative advantage: the Ricardian model.
Resources and trade: the Heckscher-Ohlin model.
Economies of scale, imperfect competition and international trade.
Firms in the global economy: multinationals and outsourcing.
International trade policy.
Balance of payments.
Written General Exam.
The exam texts will be the same for all the students, including those attending the course in the previous years. The questions of the exam are five and compulsory (time=120 minutes). The grade of each question is 6/30; to pass the exam the overall grade has to be at least 18/30. Mock exam questions will be discussed during the course.
- P.R. KRUGMAN, M. OBSTFELD, M. MELITZ, International Economics (Global ed.), 2014, 10th ed.
Previous exposure to first-year undergraduate macroeconomic and microeconomic courses is necessary and compulsory. For example:
B.D. BERNHEIM, M.D. WHINSTON, Microeconomics, McGraw-Hill;
O. BLANCHARD, Macroeconomics, Pearson.