30057 - INTERNATIONAL ECONOMICS
Department of Economics
Course taught in English
Go to class group/s: 31
Course Director:
JAN DAVID BAKKER
JAN DAVID BAKKER
Suggested background knowledge
In order to successfully follow this course, students should be familiar with basic microeconomic concepts such as budget sets, indifference curves, consumer and producer surplus, and marginal cost. They should also be at ease with simple mathematical tools such as derivatives and solution methods for linear equation systems.
Mission & Content Summary
MISSION
International Economics dominates the public debate. Has globalization helped or hurt the citizens of developed and emerging nations? What will be the consequences of Brexit for Great Britain and for the EU? Will there be a "trade war" between the United States and China, and what would its consequences be? Is the Euro-Dollar exchange rate too low or too high, and what should the European Central Bank do about it?
Getting the answers right is important for policymakers, for economic experts in government and in the private sector, and also for any interested citizen. International Economics gives no ready-made answers to these questions, but it gives us important tools to think about them. The course aims to give students an overview of this framework and show them how it can help us to better understand the world we live in.
CONTENT SUMMARY
- The world economy since the Industrial Revolution.
- The theory of comparative advantage.
- The role of resources for trade.
- The effects of trade on the income distribution.
- Economies of scale and trade.
- Exporters, multinational firms, and offshoring.
- Trade Policy.
- The balance of payments and the true meaning of trade deficits.
- Exchange rates.
- International capital flows and international financial crises.
Intended Learning Outcomes (ILO)
KNOWLEDGE AND UNDERSTANDING
At the end of the course student will be able to...
- Describe the evolution of international trade over time, and the current patterns of trade in the world.
- Explain why international trade is driven by comparative rather than absolute advantage.
- Summarize the theoretical arguments and the empirical evidence on the effect of trade on income inequality.
- Explain why the trade deficit is not a measure of economic success.
- Identify the main reasons why some firms become multinationals.
- Discuss the pros and cons of tariffs and other trade policies.
APPLYING KNOWLEDGE AND UNDERSTANDING
At the end of the course student will be able to...
- Solve simple models of international trade with two goods and two countries.
- Illustrate the consequences of an import tariff using verbal and graphical analysis.
- Critically evaluate statements about international trade made in the media.
- Calculate the equilibrium value of exchange rates using simple financial models.
- Demonstrate claims using rigorous mathematical analysis.
Teaching methods
- Practical Exercises
DETAILS
Problem sets are assigned after blocks of lessons, to evaluate individual preparation.
Assessment methods
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ATTENDING AND NOT ATTENDING STUDENTS
The assessment for this course is the same for attending and non-attending students. It is based on two elements.
- Problem Sets (30% of the grade). Six Problem Sets, which can be completed in groups of up to three students.
- Final exam (70% of the grade). The final exam consists of a series of multiple choice questions, and an exercise similar in spirit to the problem sets.
The final exam consist of two parts. The first part is a series of multiple choice questions, testing whether the students have assimilated the most important knowledge transmitted in the class. The second part is a mathematical exercise which requires formal and quantitative reasoning. The exercise evaluates whether the students are able to use the methods taught in the class, and apply them to a new problem.
Teaching materials
ATTENDING AND NOT ATTENDING STUDENTS
- The textbook for this class is: P. KRUGMAN, M. OBSTFELD, M. MELITZ, International Economics; either 11th Global Edition, 2017 or 12th Global Edition 2023.
- Furthermore, slides for all lectures and additional readings are posted online.
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