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International Economics

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International Economics Syllabus DU

Unit 1 Introduction
What is international economics about? An overview of world trade. Stylized facts about international trade

Unit 2 Neoclassical trade theories
Ricardian trade theory (notion of comparative advantage and gains from trade due to specialisation); an introduction to the distributional effects of trade; the specific factor model; Heckscher-Ohlin theory: Rybczinski and Stolper-Samuelson theorems; Heckscher-Ohlin theorem; factor price equalisation

Unit 3 New trade theories:
External economies of scale, internal economies of scale; the Krugman model; firm heterogeneity; international movement of factors; introduction to the theory of multinational firms

Unit 4 Trade policy:
Instruments of trade policy; tariffs, quotas, export subsidies, voluntary export restraints. The economics of trade policy; political economy of trade policy; controversies in trade policy

References 
1. Feenstra, R., Taylor, A. (2014). International economics, 3rd ed. Worth Publishers.
2. Krugman, P., Obstfeld, M., Melitz, M. (2018). International Economics - Theory and Policy, 11th ed. Pearson Education.
3. Pugel, T. (2015). International economics, 16th ed. McGraw-Hill.

Keywords
International trade, theories and policy

Amendment as per the last meeting on 9th July, 2021

Unit 1
Introduction: What is international economics about? An overview of world trade. Stylized facts about international trade FT : Ch 1: Trade in the Global Economy, pp1-25

Unit 2:
Neoclassical trade theories:  2.1 Ricardian trade theory (notion of comparative advantage and gains from trade due to specialisation); KOM: Ch 3 : Labour Productivity and Comparative Advantage: Ricardian Model, pp 52 -78 2.2 Specific factor model; international movement of factors, standard trade model KOM Ch 4: Specific Factors and Income Distribution, pp 79-114 KOM Ch 6: Standard Trade Model, pp 151-178 2.3 Heckscher-Ohlin theory; Heckscher-Ohlin theorem; factor price equalisation, Rybcznski and Stolper-Samuelson theorems, Heckscher- Ohlin-Vanek Model Gandolfo Ch 4: The Heckscher -Ohlin Model, pp 63-86, 90-91, 97-99 [ Section 4.5.3 excluded] Gandolfo Ch 5: The Four Core Theorems, pp 103 -108

Unit 3:
New trade theories 
3.1 Gravity model, external economies of scale, internal economies of scale; the Krugman model KOM Ch 2: World Trade an Overview, pp 39-41 KOM Ch 7 : External Economies of Scale and the International Location of Production, pp 179- 197
3.2 firm heterogeneity; introduction to the theory of multinational firms and FDI, Offshoring of Goods and Services KOM Ch 8: Firms in the Global Economy, pp 198-242 FT Ch 7: Offshoring of Goods and Services, pp 197-232

Unit 4 :
Trade policy 4.1 Instruments of trade policy; tariffs, quotas, export subsidies, voluntary export restraints. The economics of trade policy KOM : Ch 9 : The Instruments of Trade Policy, 243-273 4.2 Political economy of trade policy KOM Ch 10: The Political Economy of Trade Policy, pp 274-282 FT Ch 10: Export Policies in Resource and High Technology Industries, pp 327-366 Gandolfo Ch 10 : Tariff and Non-Tariff Barriers, Sec 10.8 Imperfect Competition and Trade Policy, pp 245-250 4.3 International Agreements: Trade, Labour, and the Environment FT Ch 11: International Agreements: Trade, Labour and Environment, pp 367-410 Gandolfo Ch 12: The New Protectionism, pp 277- 295 Gandolfo Ch 3: Offer curve, pp 43-53



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