International Economics 4003-113MSG
The classes consist of two parts. The first one presents the theory of international trade (classical, neoclassical and modern approach) and the theory of trade policy, including institutions of world trading system. The second part concentrates on the problems of the balance of payments, exchange rates and the interdependences between money, interest rates, prices and exchange rates, macroeconomic policies in an open economy and functioning of the international exchange rate system.
The lecture presents basic notions, models and theories and refers them to current economic facts, using the latest available empirical data. It refers also to additional literature that students are expected study.
Discussion classes aim at reviewing the notions and theories presented during the lecture and exercising all analytical elements related to understand causes and consequences of international trade and international financial and macroeconomic linkages.
Detailed schedule of the lecture is as follows:
PART I
1. The contemporary global economy
2. Model of Ricardo
3. Neoclassical model of HO (2x2x2)
4. Intraindustry trade: imperfect competition, product differentiation and economies of scale, the new trade theory
5. Mobility of factors of production
6. Trade policy I
7. Trade policy II
PART II
8. Balance of payments: the structure and analysis
9. Foreign currency market and foreign exchange transactions
10. Exchange rates’ determinants in the short run: exchange rate and interest rates
11. Exchange rates’ determinants in the long run: purchasing power parity and monetary approach
12. Macroeconomic policy in an open economy – Keynesian model
13. Fixed exchange rate
14. International monetary system: historical and institutional perspective
Student's workload:
lecture - 30 h
preparation to the lecture - 30 h
preparation to the examination - 30 h
total - 90 h
Type of course
Learning outcomes
Upon the course completion a student:
1. has the basic knowledge of the history and mechanisms of the contemporary world economy,
2. understands basics of the the theory of international trade (classical, neoclassical and New trade theory) including graphical analysis,
3. is able to explain the consequences of international trade for economy, particularly in terms of social welfare and economy’s structure,
4. understands the importance of assumptions in international trade theory, particularly in terms of competitions structure and will understand complementarities of different approaches,
5. is able to describe and explain causes and consequences of international flows of production factors,
6. is able to explain reasons for existence of multinationals and be able to link them with international flow of goods and factors of production,
7. is able to explain why countries use active trade policy, what tools they use and what its consequences are for economies engaged in trade (in general and sectoral perspective),
8. has knowledge on current institutional settings of international trade,
9. is able to describe structure of the balance of payments and be able to explain what are consequences of different balance of payment structure for macroeconomic equilibrium,
10. knows the determinants of the balance of payments structure,
11. is able to explain factors determining exchange rate in a short and long run,
12. is able to describe agents and transactions of the foreign currencies markets,
13. is able to describe results of macroeconomic policy in an open economy
14. knows the benefits and costs of creation of the currency union and be able to analyse critically its consequences,
15. has knowledge on current institutional settings of world financial and currency system.
Assessment criteria
Final written exam with compulsory pass of discussion classes (with grade); exam consists of multiple choice questions. Passing the exam requires 50% of the points, and the evaluation is based on the number of points obtained during the examination and exercises.
Bibliography
Compulsory readings:
[CFJ]: Caves C., Frankel J., Jones C., Handel i finanse międzynarodowe, PWE 1998;
[dG]: De Grauwe P., Unia walutowa, PWE 2003;
[JJM]: Michałek J. J. Polityka handlowa. Mechanizmy ekonomiczne i regulacje międzynarodowe, PWN 2002;
[KO]: Krugman P., Obstefld M., Ekonomia międzynarodowa. Teoria i polityka, PWN Warszawa 2007;
[RZ] Rynarzewski T., Zielińska-Głębocka A., Międzynarodowe stosunki gospodarcze. PWN Warszawa 2008;
[vM]: C. van Marrewijk, International Trade and the World Economy, Oxford University Press, 2002;
Additional readings:
[C1]: Cieślik A., Nowa teoria handlu zagranicznego w świetle badań empirycznych, PWN Warszawa 2000;
[C2]: Cieślik A., Geografia inwestycji zagranicznych: przyczyny i skutki lokalizacji spółek z udziałem kapitału zagranicznego w Polsce, WUW Warszawa 2005;
[G]: Gandolfo G., International Finance and Open-Economy Macroeconomics, Spriger 2002;
[GZ]: Gawlikowska-Hueckel K., Zielińska-Głębocka A., Integracja Europejska. Od jednolitego rynku do unii walutowej, Wyd. C.H. Beck, Warszawa 2004;
[Me]: Melitz M., The impact of trade on intra-industry reallocations and aggregate industry productivity, Econometrica, vol. 71 (6), str. 1695-1725, 2003.
[MSS] Michałek J.J., Siwiński W., Socha M. (red.) Polska w Unii Europejskiej. Dynamika konwergencji ekonomicznej, PWN Warszawa 2007;
[N] Najlepszy E., Finanse międzynarodowe przedsiębiorstw, PWE Warszawa 2007;
[SM]: Skodlarski J., Matera C., Gospodarka światowa. Geneza i rozwój, PWN Warszawa 2008;
[Z]: Zorska A., Korporacje transnarodowe. Przemiany, oddziaływania, wyzwania, PWE Warszawa 2007;
Additional information
Information on level of this course, year of study and semester when the course unit is delivered, types and amount of class hours - can be found in course structure diagrams of apropriate study programmes. This course is related to the following study programmes:
Additional information (registration calendar, class conductors, localization and schedules of classes), might be available in the USOSweb system: