INTERNATIONAL ECONOMICS

The course analyzes the fundamental elements of modern international economic theory and policy. The objective is to understand the behavior of the main economic variables at a global level, paying attention to the aspects of international trade and open economy macroeconomics. International economic phenomena will be studied by taking into account theoretical and empirical standpoints. Issues pertaining international trade and open macroeconomic policy formulation, and their consequences will be also addressed in institutional contexts. This course is inspired by the Fully Inquiry Based Learning model.

Students are assumed to be familiar with the basic concepts of Microeconomics and Macroeconomics. Moreover, an elementary knowledge of algebra and diagrammatic analysis are required. Useful references: - Microeconomics: Pindyck Robert S., Rubinfeld Daniel L., Microeconomics, Pearson-Prentice Hall publisher (a recent edition) - Macroeconomics: Blanchard, Olivier, Macroeconomics, Pearson publisher (a recent edition)

Knowledge and understanding The course will offer key theoretical tools to compare international economics theories and to understand pros and cons on each one. The course provides advanced knowledge that will enable students to understand the processes, content and consequences of different policies across countries and globally as well as their potential impact on international affairs. Applying knowledge and understanding The students will be able to: apply international trade theories to current economic situation examine international trade policies through comparing different approaches across countries in Europe, USA and Asia look at how politics and institutions shape, constrain and enable policy making Making judgments We expect students to be able to analyze international economics theories, public policy and governance models to demonstrate an in-depth, critical understanding of their scope and challenges. Throughout the whole course, students will be invited to critically analyze current events that influence international economics. Communications Skills This course will give the students the possibility to acquire and understand major terms and concepts in order to communicate their ideas, proposals, analysis and critical reasoning. This will be done through individual contribution in class, class discussions and simulations and team work among students. Learning skills This course will contribute to empower learners giving them the tools to determine benefit and challenges of certain policies and the impact of current events on international economics.

International trade theory Absolute cost advantage Comparative advantage The Standard trade model The Heckscher–Ohlin model International trade policy The instruments of trade policy Trade Restrictions: tariffs Nontariff trade barriers and the political economy of protectionism International trade agreements and the World Trade Organization Economic integration: customs unions and free trade areas International trade, economic growth and development Trade policy, recent events and international affairs (class debate) The balance of payments, foreign exchange markets, and exchange rates Balance of payments The foreign exchange market and exchange rates Exchange rate determination Foreign exchange war Global imbalances and debt sustainability The 2008 crisis: exacerbation of trade unbalances or excessively expansionary monetary policy? (class debate) International Macroeconomics Policy Fiscal and monetary policy under fixed and flexible exchange rates The International Monetary System and the role of the International Monetary Fund and the World Bank Theory of optimum currency areas and the Euro The future of the Eurozone (class debate) Globalization: Opportunity and Crisis Global value chains Technology, trade and the international division of labor The globalization paradox A trend towards de-globalization? (class debate)

Krugman P., Obstfeld M., Melitz M.: International economics, theory and policy (11th ed, Pearson) Reading lists will be provided

Lectures, classroom discussions, take-home exercises and discussion sections.

For students attending the course: - Attendance, participation and individual contribution to class discussions: 25% of the grade - Group work and class debates: 25% of the grade - Midterm exam (written): 25% of the grade - Final exam (written): 25% of the grade Students not attending the course will do the final written exam that will account for 100% of the grade. Midterm A midterm examination takes place after the first part of the course. Final exam The final exam is comprehensive. The midterm counts for 25% of the grade, the final exam for 25% or 50% if the midterm exam was not passed or taken. Students can discard the midterm grade if they perform better in the comprehensive final exam.

Instructor's approval of final paper's topic

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