International Economics

COURSE DESCRIPTION

Since markets are going global, it is relevant to understand the implications of such scenario on consumers, entrepreneurs, and governments. It is the purpose of this course to cover these topics, both from a theoretical and empirical point of view. Specifically, the course is divided into two blocks. The first one focuses on international financial issues. The second one addresses topics related to international trade.

FIRST PART: INTERNATIONAL FINANCE

Week 1. Course presentation.

• National Income Accounting and the Balance of Payments. The role of IMF
  • Probst, J. “Explainer: why some current account imbalances are fine but others are catastrophic”. The Conversation, August 2018

Week 2. Money, Interest Rates and Foreign Exchange Rate market. Exchange rate Determination in the long term

• The globaleconomy.com: “Fear of floating: fixed vs. flexible exchange rates”, 2018
• The Economist “Fix or Float?,” 28th January 1999

Week 3. Exchange rate Determination in the short term

• Coy, P. “Floating Exchange rates can cause big trouble”. Bloomberg news, Oct 2007

Week 4. Fixed Exchange Rates and Foreign Exchange Intervention. Optimal Currency Areas.

• The Economist “A Primer in Economics”. 1998
• Cukierman, A. “The Revolution in Monetary Policymaking Institutions”. Vox 2007

Week 5. The case of Euro: loses and gains. The management of asymmetric shocks in the Euro Area.

• Boltho, Andrea & Carlin, Wendy: The problems of European monetary union – asymmetric shocks or asymmetric behaviour? VOX 31 March 2012
• Fernández-Villaverde, Jesús & Garicano, Luis & Santos, Tano. “Did the euro kill governance in the periphery?” Vox 30 April 2013

Week 6: Summary of the main concepts on international finance and class reading and analysis.

•  Exam first part: the exam will be on the topics covered up to that moment

SECOND PART: INTERNATIONAL TRADE

Week 7. International Trade: general concepts. David Ricardo Model I

• Some concepts of international trade. TRADE GRAVITY MODEL
• David Ricardo Model I
  • The Economist “Hyperglobalisation and metropolitan gravity”. Oct 2013
  • Hoekman, B. “Trade and Growth – end of an era?”. from VOX CEPR, June 2015

Week 8. David Ricardo model of international Trade II

• “Trade Winds” The Economist 1997
• Several chapters from the book Cloth for Wine? The Relevance of Ricardo’s Comparative Advantage in the 21st Century, by Simon Evenett, CEPR, 06 December 2017.

Week 9. Heckscher-Ohlin Model of international trade

• Kris Mitchener, Se Yan : “Trade and the skilled wage premium: Historical evidence from China” VOX CEPR 12 February 2010
• Rodrik, D. “Does free trade bring lower prices?” Rodrik´s BLOG 2007
• The Economist “Tariffs and wages. An inconvenient iota of truth”, Aug 6th 2016

Week 10. The Classical theories versus the New theories of international trade.

• The Economist ”The relationship between trade and wages” Sep 4th 2016
• The Economist, “A survey of world trade : Why trade is good for you. A short tour of economic theory”, Oct 1998
• Adrian Wood, Jörg Mayer “Has China de-industrialised other developing countries?” VOX CEPR 28 July 2009
• The exam covering this second part will be detailed on Final Exams’ calendar