This course is available on the MPA Dual Degree (LSE and Columbia), MPA Dual Degree (LSE and Hertie), MPA Dual Degree (LSE and NUS), MPA Dual Degree (LSE and Sciences Po), MPA Dual Degree (LSE and Tokyo), MPA in International Development, MPA in Public Policy and Management, MPA in Public and Economic Policy, MPA in Public and Social Policy, MPA in Social Impact, MSc in Econometrics and Mathematical Economics, MSc in Economics, MSc in Economics (2 Year Programme) and Master of Public Administration. 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).

In exceptional circumstances, students may take this course without EC400 provided they meet the necessary requirements and have received approval from the course conveners (via a face to face meeting), the MSc Economics Programme Director and their own Programme Director. Contact the Department of Economics for more information (econ.msc@lse.ac.uk) regarding entry to this course.

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 (25%, duration: 2 hours) in the January exam period.
Exam (25%, duration: 2 hours, reading time: 10 minutes) in the summer exam period.
Essay (50%, 6000 words) in the ST.

Please note all course conveners teaching EC421 in 18/9 did not teach this course in 17/8.