module specification

The module introduces the main theoretical and empirical developments in international trade, finance and capital flows and intends to help students understand how these influence the formulation of trade policies. The module also analyses the role and assesses the impacts of institutions such as the International Monetary Fund, World Bank and World Trade Organisation. The current debates in the international economy and case studies will be drawn upon to illustrate the links between the theoretical concepts and practical realities.

The module aims at helping students to

1. develop a thorough understanding of international economic theories and concepts;
2. realise the link between theories and applications in the international economic context;
3. enhance the students’ ability to offer informed and reasoned policy advices;
4. develop students’ research skills and cultivate a critical awareness of contemporary issues.

Review of General Equilibrium Theory
Theories of Comparative Advantage: Classical Trade Theory; Ricardo and comparative advantage; distributional considerations and the Specific Factor Model
Heckscher-Ohlin model and factor price equalisation; trade policies
Theories of competitive advantage with imperfect competition and economies of scale; intra-Industry trade and strategic trade policy.
Trade interactions: Geographical Economics, multinationals and Foreign Direct Investment (FDI)
The Balance of Payments (BOP): current and capital accounts; the influence of macroeconomic factors on trade. The role of export credit agencies.
Exchange rates: theories of exchange rate determination; fixed and floating exchange rates; exchange rate regimes
Policy and credibility: target zones, financial crises and the new Open Economy Macroeconomics.
Economics of market integration: free trade areas, customs unions and monetary integration.

Students’ learning is organised around direct contact time with the teaching team, and refective independent learning. The direct contact time takes place through lectures, seminars and workshops. Students are expected to complement this 'formal' learning activity with further reading of the material suggested in the teaching sessions, solving real world-related seminar questions using economic analysis, research, writing, planning and preparation for the coursework and the final exam.

Student contact time will normally be 3 hours per week. Lecture/workshops will typically be around 2 hour duration and will deliver core subject knowledge and discuss contemporary issues with students. In the 1 hour seminar the emphasis is on student learning through participation, formative feedback and active learning. Many activities require students to carry out independent work prior to meetings with lecturers,  and increasingly through the module students are required to engage with research published in high level academic journals and research institutes.

Professional and transferable skills are developed in lectures and seminars, and through independent directed learning and assessment. Skills development is enhanced through problem solving practiced in seminars.

The module makes extensive use of blended learning  through use of virtual learning environment platforms (WebLearn, Publisher E-resources) in which module lecture material, course handbooks, and other links to key web resources are uploaded.

Upon completion of the module, it is expected that students would have achieved the following:

1. Have a systematic knowledge and understanding of how international economic theories can help formulate policy decisions and provide an explanation for the developments in the international economic context;
2. Have knowledge and a critical awareness of current policy issues in the subject and the role played by governments, non-governmental organisations and institutions such as the International Monetary Fund, World Bank and World Trade Organisation in the international economy;
3. Have a comprehensive understanding of the underlying reasons for the international flow of factors and their likely impacts on both opened and closed economies;
4. Have developed an ability to critically evaluate current research and research methodologies in the subject.
5. Have developed planning, communication, self-management and time-management skills.

There are two methods of assessment: essays and an unseen examination. The main purpose of the essay is to expand on the technical understanding by exploring the empirical side of the theory. The essay carries the weight of 30% of the mark. By the end of the module there will be a two hour unseen examination. Here students are expected to demonstrate appropriate command of the various models discussed as well as their empirical standings.

Baldwin, R. and Wyplosz, C. (2015), The economics of European integration, [5thEdition] McGraw-Hill.

Feenstra, R.C. (2015). Advanced international trade: theory and evidence. Princeton University Press.

Gopinath, G., Helpman, E. and Rogoff, K. (2014), Handbook of international economics (Vol. 4). Elsevier.

Krugman, P.R,  Obstfeld, M. and Melitz, M. (2014), International Economics: Theory and Policy, [10thEdition.], Addison-Wesley

Marrewijk, C.V. (2007), International Economics: Theory, Applications and Policy, OUP.