DEC-21806 Macroeconomics and International Trade

Course

Credits 6.00

Assumed knowledge on:

DEC-10306 Economics; ECH-10406 Microeconomics and Behaviour; ECH-21806 Microeconomics; AEP-20306 Economics of Agribusiness.

Continuation courses:

AEP-30306 The Economics of European Integration: Agricultural, Rural and Regional Policy Analysis; AEP-31306 Rural Economic Analysis; DEC-30306 Central Themes in Development Economics.

Contents:

Assuming a basic knowledge of economics, the present course deepens one's understanding of the closed economy and extends the analysis to an open economy. It explains things like inflation, unemployment, current account deficits, international debt, and depreciating exchange rates, and also pays attention to the role of economic policy instruments. In addition, it reviews the theories that explain international trade patterns between countries and also international movements of production factors. Further, it studies the effects of different kinds of trade protection like tariffs and quotas and also pays attention to political aspects of trade policy.

Learning outcomes:

After the course, the student will be able to understand the basic concepts and their application of open-economy macroeconomics and international economics. In particular, he or she will be able to:
- apply the trade theories based on comparative advantage and scale economies;
- acknowledge the gains of trade and its income distribution effects;
- analyse the effects of international factor mobility;
- establish the income distribution effects of trade instruments;
- construct (in a conceptual way) the current account and the balance of payments;
- employ both the Keynesian model and the Classical model for an open economy;
- study the effects of fiscal, monetary, and trade policies in both the short and the long run;
- show a basic understanding of the working of the money market and the market of foreign exchange.

Activities:

Lectures on the course materials. Practicals in which students make exercises on the course materials, and use quantitative information about country differences in macroeconomic and international trade conditions and policies.

Examination:

- weekly exercises (20%);
- written exam with open questions (80%).
For the written exam a mark of 5.0 or higher is required

Literature:

A course guide is available at the secretariat. Literature:
Mankiw, N.G.; Taylor, M.P. ( 2007). Macroeconomics, European Edition Worth Publishers, 2008. 632p. ISBN-10: 0716773694.
Krugman, P.; Obstfeld, M.; Melitz, M. (2012). International Economics: Theory and Policy, Addison-Wesley Publishing Company. 9th ed. 736p. ISBN-10: 0132146657.