Dr Swati Dhingra 32L. 2.31, Dr Thomas Sampson 32L. 2.34 and Dr Gianluca Benigno 32L. 1.12

This course is available on the MPA in European Public and Economic Policy, MPA in International Development, MPA in Public Policy and Management, MPA in Public and Economic Policy, MPA in Public and Social Policy, MSc in Econometrics and Mathematical Economics, MSc in Economics and MSc in Economics (2 Year Programme). This course is available with permission as an outside option to students on other programmes where regulations permit.

Students must have completed Introductory Course in Mathematics and Statistics (EC400).

A graduate course in international economics consisting of i) the fundamentals of trade theory and its application to policy and ii) international macroeconomics.

Trade: Comparative advantage and the gains from trade. Theories of comparative advantage. Factor endowments, the international location of production, and patterns of international trade. Empirical tests of trade models. Trade and the labour market. Intra-industry trade. Firm heterogeneity and selection into trade. Foreign direct investment. General equilibrium trade policy.

International macroeconomics: Intertemporal trade and the current account balance. Dynamics of small open economies. The real exchange rate and the terms of trade. Uncertainty and international financial markets. Monetary model of exchange rate determination: flexible and sticky prices. Introduction to currency crises models.

20 hours of lectures and 10 hours of seminars in the MT. 20 hours of lectures and 10 hours of seminars in the LT.

Two marked assignments per term.

A full reading list will be distributed at the beginning of the course. Some important items are: R Feenstra, Advanced International Trade: Theory and Evidence, Princeton, 2004; A Dixit & V Norman, Theory of International Trade, Cambridge, 1980; E Helpman & P Krugman, Market Structure and Foreign Trade, MIT, 1985; M Obstfeld & K Rogoff, Foundations of International Macroeconomics, MIT Press, 1996.

Exam (50%, duration: 3 hours) in the main exam period.
Essay (50%, 6000 words) in the ST.