Elements of International Economics
PROF. RAUL CARUSO
COURSE AIMS
The course is designed to provide students with some of the basic elements
necessary for understanding the main dynamics of international markets, and is
divided into four areas of analysis. The course starts off with the presentation of
several theoretical elements aimed at explaining the origin and nature of
international trade. The themes of trade and trade relations are analysed in light of
classical theories and new approaches that consider localisation of industries at a
global level, the importance of increasing returns, and intra-industrial trade. A
particular emphasis will be placed on the issue of the productivity of an economic
system and its international competitiveness. In tandem with these studies, the
course looks at several basic tools for "measuring" and interpreting international
trade interaction.
The analysis then focuses on several basic concepts of international monetary
economics. More specifically, the course looks at the relationship between
exchange rates and at the level of domestic prices within an economic system.
Several dynamics characterising the global capital market and the progressive
monetary integration and interdependence will then be described. Another analysis
regards the role of the different players present on the international scene: nation
states, international organisations and multinational businesses. The emphasis then
shifts to the issues of business integration and the development of systems and of
international economic institutions. During the entire course, continuous reference
will be made to empirical evidence and to the study of specific cases, and such
topics are designed to make up the course's fourth structural element. The
overlapping of various analysis plans is designed to enhance understanding of
economic globalisation.
COURSE CONTENTS
Theory of International Trade
– Classical theories of international trade: absolute advantages, comparative
advantages and factors employed.
– Productivity and Comparative Advantages.
– New theories of international trade: types of market, economy of scale, intraindustrial trade.
– Tools for measuring international trade.
– Centre and periphery in international trade.
– Home bias, gravitation and international trade.
– Network and International Trade theories: the WEB World Trade.
Elements of International Monetary Economics
– Relationship between prices and exchange rates: single prices and purchasing
power parity.
– Interest-rate conditions and interest-rate parity.
– Balance of payments.
– Movement of capital and monetary integration.
Commercial policies and international regimes
– Commercial policy instruments: tariffs and subsidies.
– Strategic Commercial Policy.
– International economic policies and systems.
– Reciprocality and preferences in international economic agreements.
– Relationships between northern and southern hemispheres.
Case Studies
– The first globalisation: 1870-1914.
– Trade sanctions.
– The EU’s common agricultural policy.
– Trend and impact of commodity prices at a global level.
– Empirical evidence of the relationship between international trade and
economic growth.
– The phenomenon of transfers of emigrants at a global level.
READING LIST
P.R. KRUGMAN-M. OBSTFELD-M.J. MELITZ, Economia Internazionale, Vol. 1, Pearson, Milano.
TEACHING METHOD
Class lectures and group seminars. Most of the course will be taught in the classroom,
with the support of slides projected on the blackboard.
ASSESSMENT METHOD
The exam consists of a two-hour written test. Students having achieved a passing grade
on a written test may request a supplemental interview at the same time at which the regular
exam is scheduled. Students attending class on a regular basis have the option of presenting
a report on a subject of their choice which is approved by the professor; the professor will at
any rate propose a list of topics, though students may choose other topics. Any student
electing to present a report will be required to discuss it at the time of the exam.
NOTES
Further information can be found on the lecturer’s webpage
http://www.unicatt.it/unicattolica/docenti/index.html or on the Faculty notice board.
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