International economics 4003-INEC-OG-Z

CLASSES WILL TAKE PLACE ON THE WEEKEND

The course introduces a number of models that help us understand the reasons why countries trade goods and services. Empirical evidence will be used to highlight the strengths and limitations of the theories introduced. In addition, the political economy of international trade will be discussed.
Topics covered include: Key stylised facts of international trade; gains from trade and the law of comparative advantage; core models of international trade to review different explanations of observed trade patterns; foreign direct investment; labour mobility; political economy of international trade and protectionism.

Topics:

World Trade: an Overview
The Ricardian Model and Comparative Advantage
Specific Factors Model and Income Distribution; Trade, Employment and Inequality
Firms in the Global Economy, Outsourcing, Offshoring, & FDI
Instruments of Trade Policy
Political Economy of Trade Policy; Protectionism
Societal Aspects of International Trade: Trade & Democracy
Societal Aspects of International Trade: Globalization & and the Rise of Populism

Course coordinators

Monika Köppl-Turyna

Course dedicated to a programme

4EU+Courses

Type of course

general courses

Mode

Remote learning

Learning outcomes

EXPERTISE
The course provides students with the basic tools of international trade theory and policy and the societal effects of trade. Upon the completion of the course a student:
- knows basic neoclassical and new international trade theories
- knows basic trade policy tools and their effects
- knows basic theories of international economic integration
- knows major international economic organizations that shape trade policy

SKILLS
Upon the lecture completion a student:
- is able to interpret developments in international trade using basic neoclassical and new trade theories
- is able to explain the patterns of modern trade, their causes and effects
- is able to understand and interpret determinants of trade policies in developed and developing countries
- is able to analyse the relationships between international trade policy and lobbying groups
- is able to understand the reasons and outcomes of trade policy tools
- is able to identify the relationships between trade patters and political phenomena

Assessment criteria

ASSESSMENT
Assessment of the course is based on a short seminar paper on the topics discussed in class. The paper should be a case study of observed world phenomena based on the theoretical and empirical concepts discussed in class.

A rough outline is as follows (the order can be changed):

1. Introduction and context (max. half a page)
2. Theoretical concept presented (max. one page)
3. Case study with a research question (max. one paragraph)
4. Detailed explanation of the solution (1-2 pages)

The entire paper should not be longer than 5 pages (font size 12pt, normal margins, line spacing 1.5).

The following assessment criteria are applied (total 25 points):
1. Introduction & context: description complete, references appropriate and sufficient (5 points)
2. Theoretical concept: complete and correct definition of the concept, sufficient theoretical explanation and necessary formulas or figures (10 points)
3. Case: correct application of the concept to the problem, correct implementation of the calculations or explanations, complete and detailed description of the procedure, if necessary, figures with applied data. (10 points)

Bibliography

Textbook: Krugman, Paul, Maurice Obstfeld, and Marc Melitz. International Economics: Theory and Policy

Additional Readings:

Autor, D., Dorn, D., Hanson, G., & Majlesi, K. (2020). Importing political polarization? The electoral consequences of rising trade exposure. American Economic Review, 110(10), 3139-3183.

Carroll, D. R., & Hur, S. (2020). On the heterogeneous welfare gains and losses from trade. Journal of Monetary Economics, 109, 1-16

Carroll, D., & Hur, S. (2019). On the distributional effects of international tariffs. International Economic Review

Di Tella, R., & Rodrik, D. (2020). Labour market shocks and the demand for trade protection: Evidence from online surveys. The Economic Journal, 130(628), 1008-1030.

Diego Puga , Daniel Trefler, International Trade and Institutional Change: Medieval Venice’s Response to Globalization, The Quarterly Journal of Economics, Volume 129, Issue 2, May 2014, Pages 753–821

Doerr, S., Gissler, S., Peydro, J. L., & Voth, H. J. (2020). From finance to fascism: The real effect of Germany’s 1931 banking crisis.

Fajgelbaum, P. D., & Khandelwal, A. K. (2022). The economic impacts of the US–China trade war. Annual Review of Economics, 14, 205-228

Goos, M., Manning, A., & Salomons, A. (2009). Job polarization in Europe. American economic review, 99(2), 58-63.

López-Córdova, J. E., & Meissner, C. M. (2008). The impact of international trade
on democracy: A long-run perspective. World Politics, 60(4), 539-575.

Pástor, Ľ., & Veronesi, P. (2021). Inequality aversion, populism, and the backlash against globalization. The Journal of Finance, 76(6), 2857-2906

Rodrik, D. (2021). Why does globalization fuel populism? Economics, culture, and the rise of right-wing populism. Annual Review of Economics, 13, 133-170.

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: