Dr Swati Dhingra, Mr Justas Dainauskas and Dr John Morrow

This course is available on the 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 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).

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.

Essay (25%, 1500 words) in the LT Week 5.
Essay (25%, 1500 words) in the ST Week 1.
Essay (50%, 6000 words) in the ST.

The short essay will be on a topic covered during the course in each term. The short essay topic for MT can be of students' own choosing based on the material covered in the MT. The short essay topic for LT will be based on a topic from the material covered during the LT. The essay components are as follows:

1. Maximum word length: 1500 words
2. Four parts: Abstract, Introduction, Content, Conclusion.
3. Abstract: Include an abstract of 100 words or fewer.
4. Introduction: The essay would consist of an introduction which clearly states the question being studied, the motivation for examining the question and the contribution that the essay plans to makes to the study of this question (relative to other work in the area).
5. Content: Having specified the question, the essay would contain theoretical and/or empirical evidence for the answer being proposed. The answer consists of an explanation and a maximum of four exhibits. An exhibit refers to a graph, table, figure, proposition or set of equations (limit to under three in each exhibit) that contains the theoretical or empirical evidence for the answer.
6. Conclusion: The essay would end with a concluding paragraph that states the answer to the question or broader implications of it.
The short essays can be stepping stones to the dissertation. The dissertation must contain content that substantively contributes content over and above that submitted as part of the short essays.