Module description
This module provides an introduction to models of international trade and their predictions of trade patterns, with some consideration of empirical studies and policy issues. The goals of this module are to:
- Introduce students to classical and new theories of international trade
- Use examples and empirical evidence to introduce students to the methods most commonly used in the economic analysis of international trade.
- Enable students to engage with trade theory in a critical manner, understanding the arguments used both in favour and against trade liberalisation.
Assessment details
2-hour written exam (90%) & participation (10%)
Educational aims & objectives
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Introduce students to classical and new theories of international trade
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Use examples and empirical evidence to introduce students to the methods most commonly used in the economic analysis of international trade.
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Enable students to engage with trade theory in a critical manner, understanding the arguments used both in favour and against trade liberalisation.
Learning outcomes
By the end of the module the students will be able to:
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demonstrate general knowledge and understanding of international trade theory and policy
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understand and manipulate simple economic models, both graphically and analytically
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read and engage critically with the empirical literature on international trade
Teaching pattern
Provisional Lecture Schedule
Week 1. An overview of world trade, gravity, and borders
Week 2. Ricardian model of comparative advantage
Week 3. The specific factors model
Week 4. The Heckscher-Ohlin model
Week 5. Economies of scale and trade
Week 6. Monopolistic competition and trade
Week 7. Firms in the Global Economy
Week 8. Trade policy
Week 9. The political economy of trade policy
Week 10. Trade policy in developing countries
Suggested reading list
Key Reading
All compulsory readings are chapters from: International Economics, Theory and Policy, Paul Krugman, Maurice Obstfeld, Marc J. Melitz., 9th or 10th Edition, Pearson.