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International Trade Theory and
Policy
Rinchen Dorji
February 24, 2025
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Trade? – An exchange of goods and services
between people or countries. Since this
course deals with international trade, we will
focus on the exchange of goods and services
between nations. Note that trade establishes
economic relationships (interdependence)
among nations.
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Large economies, such as the US, Japan,
France, etc which as produce most of the
products it needs engage in trade
Small nations like Bhutan, Switzerland,
Austria, etc also trade
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Why do countries trade?
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Let’s look at the nation’s interdependence!
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Economic interdependence has also been
on the rise over the years
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International Trade and National
Well-being
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International Trade and National
Well-being
Trade leads to increased access to goods and
services
Trade offers commodities at a lower prices
It also provide employment opportunities
and earnings
Share advanced technologies and knowledge
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Bhutan’s major trading partners
Country-wise Ranking Order
Import
Export
India
India
China
Bangladesh
Singapore
Italy
Thailand
Nepal
Hong Kong China
Bangladesh South Korea
Sweden
Spain
Nepal
Netherlands
Germany
France
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Bhutan’s major import items (in 000 Nu.)
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Bhutan’s major export items besides
Electricity (in 000 Nu.)
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Why this Module?
To understand the basis for trade
To study the gains from trade
To examine the reasons for and the effects of
trade restrictions
To analyze the effects of trade policies on a
nation’s welfare and on the welfare of other
nations
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What is this Module about?
This module has the following areas of
discussion:
1
International Trade Theory
2
Welfare Implications of Trade
3
International Trade Policy
4
Economic Integration
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Teaching and Assessment Approaches
Lecture Session
Case Analysis
Group Discussions
Presentations
Assignments
Coursera Program
Semester-end Examination
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Assessment Approaches
Assessment Division
Continuous Assessment – 50 Percent
Semester-end Examination – 50 Percent
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Essential and Reference Texts
Salvatore, D. (2020). International
Economics, 13th Edition, WILEY
Publication
Krugman, Obstfeld and Melitz. (2014).
International Economics: Theory and Policy,
10th Edition, Pearson/Addision Wesley
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THANK YOU!!!
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