EC351: International Economics

Globalisation has seen the integration of world markets. Goods made in Asia can be sold in Europe at a fraction of the cost, and technology has allowed activities to be outsourced for greater efficiency. As a result, governments have to carefully consider their trade policies and the macroeconomic landscape to ensure local social and economic goals are met.

This course provides an analysis of the economic relationships between countries, covering both trade and monetary issues. The first half of the course deals with international trade theory and policy. You will explore important topics such as why countries trade with each other and the effect of international trade on welfare and income distribution. You will also analyse the role of firm heterogeneity in international trade and the links between globalisation and inequality.

The second half of the course considers international macroeconomics. Covering key topics such as the balance of payments accounts, open economy income identities, and the effect of currency valuations, you will gain a comprehensive understanding of the current policy environment and its impact on international trade relations. By the end of the course, you will be able to apply the theory and economic frameworks to analyse the macroeconomic landscape and the alternative policy options available to governments across the world.

Prerequisites: Intermediate microeconomics (to the equivalent of EC201) and macroeconomics (to the equivalent of EC202), as well as knowledge of single variable calculus.

The material covered is not mathematically complex, but it is taught in a formal and rigorous manner, which assumes a good familiarity with basic economic concepts.

Level: 300 level. Read more information on levels in our FAQs

Fees: Please see Fees and payments

Lectures: 36 hours

Classes: 18 hours

Assessment: Two written examinations

Typical credit: 3-4 credits (US) 7.5 ECTS points (EU)

Please note: Assessment is optional but may be required for credit by your home institution. Your home institution will be able to advise how you can meet their credit requirements. For more information on exams and credit, read Teaching and assessment

This course is suitable if you are interested in gaining a comprehensive understanding of the relationship between international trade and economic growth. It is especially well suited to you if you want to pursue a career in research, government, policy development, or consulting. 

• Understand the effect of international trade on welfare and income distribution.

• Analyse the role of firm heterogeneity in international trade.

• Interpret the relationship between international trade and regional inequality.

• Discuss price levels, output and exchange rates in the long and short run.

• Analyse the liquidity trap, and the role of leveraging in financial crises.

• Apply economic frameworks to interpret current macroeconomic issues.

• Analyse the policy options available to governments using macroeconomic theory.

The design of this course is guided by LSE faculty, as well as industry experts, who will share their experience and in-depth knowledge with you throughout the course.