module specification

This module introduces students to the fundamental aspects of international trade theories, commercial policies, open economy macroeconomics, and the international monetary system. The module will examine both theoretical and contemporary policy issues in the international economy.

EC5004 Macroeconomics or EC5005 Macroeconomics and the Global Economy,  or equivalent

This module aims to give students:
1. an awareness of the pattern of world trade and the interdependence of national economies;
2. an understanding of the contemporary policy and institutional issues in the world trade and monetary systems;
3. a good knowledge of the causes of international trade and balance of payments problems;
4. a good understanding of exchange rate determination and alternative exchange rate systems.

In addition to the subject-specific aims, the module aims to enhance students’ writing, cognitive, analytical and presentation skills.

International Finance
Balance of Payments: Measurement, causes of external disequilibria, financing vs adjustment, theoretical approaches to the BoPs: elasticity, absorption and intertemporal approaches.
Foreign Exchange Rates: Theory and Policy: Uncovered interest parity. Purchasing power parity hypothesis. Flexi-price monetary model. The Dornbush model. Portfolio balance model.
The International Monetary System: Key characteristics. Evaluation criteria. The Bretton Woods system. The present non-system. Fixed vs floating exchange rates. The 'Target Zone Proposal' and the MacKinnon plans. Optimal currency areas

International Trade
Gains from trade. Absolute advantage. Comparative advantage. Ricardian Model. Empirical  evidence.
Specific Factors. Dutch Disease. Offer curves. Heckscher-Ohlin model: Factor price equalization.
Leontief  paradox. Stolper-Samuelson theorem. Rybczynski theorem. Immiserising growth.
New trade theory: Product variety. Economies of scale. Imperfect competition. Intra-industry trade. Dumping.
International factor movements: Labour. Multinationals. Foreign direct investment.
Trade Policy: Tariffs. Subsidies. Common Agricultural Policy. Import quotas. General Equilibrium Effects of a Tariff. Effects of a Tariff or Quota for a monopoly.

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 presentations, class tests, 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 issues with students. In the 1 hour seminar the emphasis is on student learning through participation, formative feedback and active learning.

Both lecture and seminar activities are structured to enable students to develop initially basic knowledge and  then to progress to develop higher order skills of synthesis and critical evaluation. Many activities require students to carry out independent work prior to meetings with lecturers. 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.

On successful completion of this module students will be able to:
1. demonstrate a broad knowledge and a systematic understanding of international economics, covering theory, policy and application;
2. apply a range of specialist skills to the analysis of international economic relations, including the application of analytical or quantitative techniques;
3. marshal evidence and assimilate, structure, analyse and evaluate qualitative and quantitative data to understand and critically evaluate policy issues in the subject;
4. demonstrate planning, communication, self-management, time-management, and self-presentation skills.

The coursework and examination will require students to write answers to questions addressing the underlying principles or issues of the subject matter. It will also test students’ ability to apply a range of specialist skills to the analysis of international economic relations, including the application of analytical or quantitative techniques.  The coursework and the final exam will both assess the student’s: knowledge and understanding of international economics, covering theory, issues, policy and application; ability to marshal evidence, both qualitative and quantitative, to understand and critically evaluate policy issues in the subject.

Attendance data is collected by lecturers, tutors, and workshop which is added to Evision and this information will constitute the main element of the attendance/participation mark. However, there will also be a reward for active and constructive class participation which is be assessed in discussion with the seminar group.

To pass the module, a student must obtain an overall 40% pass mark.

Pilbeam, K, International Finance (3rd ed.), Macmillan, 2006
Hallwood, C. P. and MacDonald, R. (3rd ed.): International Money and Finance, Blackwell, 2000
Krugman, P. & Obstfeld, M. (8th ed.): International Economics, 2000, Addison-Wesley.
D. Salvatore, International Economics: Trade and Finance, 10th ed., 2010, John Wiley & Sons