International economics
PROF. ROSARIO CRINÒ
COURSE AIMS
The aim of this course is to introduce students to some of the main topics in
international economics. The course covers: trade based on comparative advantage
(differences in productivity or factor endowments); trade based on economies of
scale and product differentiation; international factor movements; trade policy;
current account and balance of payments; law of one price and purchasing power
parity; exchange rates; currency areas.
COURSE CONTENTS
1. Stylized facts on globalization
Class notes. KOM, chapter 2.
2. Trade based on comparative advantage
2.1 Comparative advantage due to differences in productivity: The Ricardian
model. Class notes. KOM, chapter 3.
2.2 Comparative advantage due to differences in factor endowments: The
Heckscher-Ohlin model. Class notes. KOM, chapters 5-6.
3. Trade based on economies of scale and product differentiation. Class notes.
KOM, chapters 7-8.
4. International migration and transfers. Class notes. KOM, chapter 6.
5. Multinational firms and foreign direct investment. Class notes. KOM, chapter
8.
6. Instruments of trade policy. Class notes. KOM, chapter 9.
7. Main issues in trade policy. Class notes. KOM, chapters 10-12.
8. Current account and balance of payments. Class notes. KOM, chapter 13.
9. Law of one price and purchasing power parity; long-run determinants of the
real exchange rate. Class notes. KOM, chapter 16.
10. Short-run determinants of the real exchange rate: monetary shocks, sticky
prices, and the nominal exchange rate. Class notes. KOM, chapters 14-15.
11. Output and the exchange rate. Class notes. KOM, chapter 17.
12. Fixed exchange rates and balance of payments crises. Class notes. KOM,
chapter 18.
13. Optimum currency areas and the Euro. Class notes. KOM, chapter 21.
READING LIST
Material
Class notes and book chapters as indicated above.
Textbook
P. KRUGMAN-M. OBSTFELD-M. MELITZ, (KOM), International Economics: Theory and Policy,
Pearson, Tenth Edition, 2015.
TEACHING METHOD
Lectures.
ASSESSMENT METHOD
Mid-term exam (90 minutes, written test with open questions) and final exam (90
minutes, written test with open questions).
NOTES
Students are expected to have taken Microeconomics and Macroeconomics.