International Economics

The aim of the course is to cover the basic concepts and analytical tools that are absolutely necessary for the understanding of the complex economic developments in the field of international trade in goods and services. The first objective is to describe the nature of international trade, its causes and effects. The course begins with the classical economists' traditional theories of comparative advantage and ends with a contrast of views on free trade and state intervention. The rich examples from global developments and references to actual data and institutions add particular interest to the course content. Content: Ricardo's comparative advantage: the paradigm, the benefits of international trade. Special factors of production and the distribution of income. The neoclassical approach: the Hecksher-Ohlin theorem, implications for the domestic economy. International trade and economic growth: terms of trade, distribution of income. The role of imperfect competition in international trade. State intervention and international trade: tariffs, quotas and other forms of intervention. Free trade or state intervention: the political economy of international trade. Customs unions and other preferential trade relations. Labour mobility: migration and its effects. Capital mobility: multinational enterprises, structure, operation, effects.