The course aims to provide students with an understanding of, and the competence to apply economic analysis to, the main issues confronting business and the economy in the modern international trading and financial environment. Issues of contemporary international debate and policy relevance are investigated in the context of the development of the core body of the theory of international trade, commercial policy and international monetary economics.

The course commences with a discussion of the nature of the gains from trade specialisation, the determinants of the pattern of world trade, and the factors that influence the benefits to an economy (and its component sectors and groups) from participation in the international trading system. A significant proportion of the course will focus on commercial policy issues, commencing with an analysis of uni trade policy changes and then examining the economics of trade policy coordination through multial and regional arrangements. The debate on the role of industrial policy in the process of economic development will also receive attention. The latter part of the course will develop the understanding of macroeconomic issues and policy in the open economy setting, with particular attention being paid to the internationalisation of financial markets and its implications for the interdependence of macroeconomic outcomes, the analysis of international macroeconomic policy coordination and monetary union, and the role of expectations and risk in determining spot and forward currency exchange rates.

On completion of the course, students should be able to: 
• Analyse the determinants, patterns and effects of international trade within a general equilibrium framework, where the interrelationships amongst product and factor markets in an economy are explicitly taken into consideration.
• Describe theoretical models in international economics and apply these theories to the real world issues.
• Explain the effect of government policies in international economics.
• Distinguish between the efficiency implications and distributional consequences of trade and trade policy.
•  Understand the role of politics in trade and vice versa.
• Assess the costs and benefits of trade policy from an economic point of view.

In-class tests plus a three-hour end-of-semester examination.

Two/Three lectures and one tutorial per week.

ECON2101/2111 Microeconomics 2 (P or H) and ECON2102/2112 Macroeconomics 2 (P or H).

Please refer to Course Website