Elements of International Economics
Prof. Raul Caruso
COURSE AIMS
The course is designed to provide students with some of the basic elements necessary for understanding the main dynamics of international markets, and is divided into four areas of analysis. The course starts off with the presentation of several theoretical elements aimed at explaining the origin and nature of international trade. The themes of trade and trade relations are analysed in light of classical theories and new approaches that consider localisation of industries at a global level, the importance of increasing returns, and intra-industrial trade.A particular emphasis will be placed on the issue of the productivityof an economic system and its international competitiveness. In tandem with these studies, the course looks at several basic tools for "measuring" and interpreting international trade interaction.
The analysis then focuses on several basic concepts of international monetary economics. More specifically, the course looks at the relationship between exchange rates and at the level of domestic prices within an economic system. Several dynamics characterising the global capital market and the progressive monetary integration and interdependence will then be described. Another analysis regards the role of the different players present on the international scene: nation states, international organisations and multinational businesses. The emphasis then shifts to the issues of business integration and the development of systems and of international economic institutions. During the entire course, continuous reference will be made to empirical evidence and to the study of specific cases, and such topics are designed to make up the course's fourth structural element. The overlapping of various analysis plans is designed to enhance understanding of economic globalisation.
COURSE CONTENTS
Theory of International Trade
–Classical theories of international trade: absolute advantages, comparative advantages and factors employed.
–Productivity and Comparative Advantages.
–New theories of international trade: types of market, economy of scale, intra-industrial trade.
–Tools for measuring international trade.
–Centre and periphery in international trade.
–Home bias, gravitation and international trade.
–Network and International Trade theories: the WEB World Trade.
Elements of International Monetary Economics
–Relationship between prices and exchange rates: single prices and purchasing power parity.
–Interest-rate conditions and interest-rate parity.
–Balance of payments.
–Movement of capital and monetary integration.
Commercial policies and international regimes
–Commercial policy instruments: tariffs and subsidies.
–Strategic Commercial Policy.
–International economic policies and systems.
–Reciprocality and preferences in international economic agreements.
–Relationships between northern and southern hemispheres.
Case Studies
–The first globalisation: 1870-1914.
–Trade sanctions.
–The EU’s common agricultural policy.
–Trend and impact of commodity prices at a global level.
–Empirical evidence of the relationship between international trade and economic growth.
–The phenomenon oftransfersofemigrants at a global level.
READING LIST
P. Krugman-M. Obstfeld-M. Melitz, Economia Internazionale I (con Piattaforma Myeconlab).
TEACHING METHOD
Class lectures and group seminars.Most of the course will be taught in the classroom, with the support of slides projected on the blackboard.
ASSESSMENT METHOD
The exam consists of a two-hour written test. Students having achieved a passing grade on a written test may request a supplemental interview at the same time at which the regular exam is scheduled. Students attending class on a regular basis have the option of presenting a report on a subject of their choice which is approved by the professor; the professor will at any rate propose a list of topics, though students may choose other topics. Any student electing to present a report will be required to discuss it at the time of the exam.
NOTES
Further information can be found on the lecturer’s webpage at or on the Faculty notice board.