DEC-21806 Macroeconomics and International Trade

Course

Credits 6.00

Assumed knowledge on:

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

Continuation courses:

AEP-30306 The Economics of European Integration: Agricultural, Rural and Regional Policy 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 successful completion of this course students are expected to be able to apply the basic concepts of open-economy macroeconomics and international economics. In particular, students are expected to be able to:
- apply the trade theories based on comparative advantage and scale economies;
- identify the gains of trade and its income distribution effects;
- analyse the effects of international factor mobility;
- analyse the income distribution effects of trade instruments;
- construct (in a conceptual way) the current account and the balance of payments;
- measure (in a conceptual way) national income, inflation, and unemployment;
- apply both the Keynesian model and the Classical model for an open economy;
- analyse the effects of fiscal, monetary, and trade policies in both the short and the long run;
- understand the basics of the money market and the market of foreign exchange;
- work with online economics databases such as the WDI.

Activities:

Lectures on the course materials. Practical's 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:

The course material consists of two books:
- Krugman, P.R., M. Obstfeld, M.J. Melitz, International Economics. Theory and Policy, 10th edition, Addison-Wesley, 2014
- Mankiw, N.G. and M.P. Taylor, Macroeconomics. European Edition, 2th edition, Worth Publishers, 2008 and 2014.