International Trade and Finance 4003-201HFM
The topics covered will deal with modern trade theory and will include increasing returns, imperfect competition, empirical tests. The second part of the course describes developments in trade theory, with focus on strategic trade policy and recent developments in trade liberalization.
List of topics covered:
Neoclassical trade theory: main theorems: H-O, Stolper-Samuelson, Samuelson and Rybczynski, general equilibrium model, welfare implications of trade.
New trade theory: assumptions: imperfect competition, increasing returns to scale, and "love for variety" (D-S demand function).
Standard Krugman model of intra -industry trade.
International factor mobility.
Instruments of trade policy: neoclassical analysis of tariffs, import quotas, subsidies.
Strategic trade policy: assumptions regarding imperfect competition and increasing returns to scale. Brander-Spencer and Eaton-Grossman models.
lecture - 30 h
preparation to the lecture - 30 h
preparation to the exam - 60 h
total time - 120 h
Type of course
The students after passing exam know:
1. assumptions, structure and conclusions from the trade thoery models (neo classical new trade theory of I generation (Krugman) and II generation with heterogeneous firms (Melitz)
2. mechanisms and implications of main trade policy instruments (tariffs, quantitative restrictions, subsidies, anti-dumping measures)
3. models of strategic trade policy (imperfect competition)
4. neoclassical models of political economy of trade policy
5. key notions regarding new economic geography
Abilities: students should be able to analyze:
1. the determinants of the volume and structure of international trade flows
2. welfare implications for the consumers, producers and fiscal revenues resulting from applications of various trade policy instruments
3. political motivations of governments applying various economically inefficient trade policy instrument and the role played by different interest groups (lobbies)
Students should be able to understand:
4. the causes of international trade flows and globalization of the world economy.
5. the constraints of efficient applicataions of the strategic tarde policy
Students should be able to explain:
6. the significance of empirical analysis for verification of trade theories and policies
7. the roots of agglomeration process in the context of economic integration polices
The basis for the graduation is the written exam at the end of the lecture. It consists of 20 multiple choice questions and 6 open questions. In addition there is premium for regular attendance at the lecture; up to 15 percent of the number of points at the examination.
• Paul R. Krugman, Maurice Obstfeld, Marc Melitz, International Economics, Theory and Policy, Pearson, 202
• C. Marrewijk, International Economics, Oxford University Press, 2012
J.J. Michałek, (2002), Międzynarodowa Polityka handlowa. Mechanizmy ekonomiczne i regulacje międzynarodowe. PWN.
• and other handouts to the lecture available in the electronic formats (PDF) in the intranet.
• K. Gawlikowska-Hueckel, A. Zielińska-Głębocka, Integracja Europejska. Od jednolitego rynku do unii walutowej, Wyd. C.H. Beck, Warszawa 2004;
• J. J. Michałek, W. Siwiński, M. Socha red. naukowa: Polska w Unii Europejskiej. Dynamika konwergencji ekonomicznej, PWN Warszawa 2007;
• J. Francois, K. Reinert, Applied Methods for Trade Policy Analysis, A Handbook, H. Bowen, A. Hollander, J.M. Viaene, Applied International Trade Analysis, Macmillan Press, 1998,
• Brakman S., Garretsen H., van Marrevijk Ch., An introduction to geographical economics, Cambridge U.P., 2003.
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: