The course examines the microeconomics of international trade. First we examine the gains from trade, the determinants of patterns of international trade and the effects of trade on income distribution, all in low-dimensional models. We will also have some discussion of extensions to higher dimensions.  We then turn to policy and analyse a number of arguments, both traditional and more recent, for active trade and industrial policies. Time permitting, we will also analyse preferential trading areas and the political economy of trade policy.

On satisfying the requirements for this course, students should:
• Be familiar with the basic models of international trade and their essential properties;
• Understand the tools taught in class and be able to recognise their application to the analysis of real world fact situations;
• Be able to construct theoretical models of international trade related phenomena and manipulate them.
• Read and understand professional economics articles in the field of international trade theory.

Assessment is on the basis of a number of Problem Sets, a midterm examination, a final examination and a class presentation.  The presentation will involve the exposition and critique of a leading paper in trade theory.  The problem sets involve a mixture of analytical numerical questions and brief written answers.  The exams also include a range of question types: short answers, definitional questions, analytical problems and essays.

10 hours per week

An honours degree in Economics with H2A or higher, or completion of a Graduate Diploma in Economics with an exit grade of Merit or better

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