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After completing the course International Economics the student is able to:
- Explain economic problems in terms of international economic models;
- Apply the basics of national income accounting and the balance of payments and describe the basic adjustment mechanism for the exchange rate and the balance of payments;
- Distinguish key parities in international economics and explain their role in the determination of the exchange rate in the short and long run;
- Discuss the role of money and monetary policy for the determination of the exchange rate and explain why exchange rates may overshoot their long run value;
- Distinguish alternative exchange rate regimes, explain the policy trilemma for open economies and discuss the main developments in international monetary economics;
- Distinguish and explain the alternative theories of international trade, understanding their empirical validity as well;
- Interpret and explain the consequences of international trade for countries as a whole as well as for different groups of constituents in society;
- Explain and understand the role firms play in the world economy;
- Explain the working and effects of trade policy in partial equilibrium;
- Understand the political economy of trade policy and the position of the WTO therein.
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To assess the consequences of increased globalization for countries and their constituents, a proper understanding of the economic mechanisms that play a role in the background is required. This is the domain of international economics. Why do countries trade with each other? For whom is such trade beneficial? Are there valid reasons for countries to restrict trade? Are exchange rate movements good or bad for an economy? What are their effects? What is it that actually drives exchange rate changes? Is there a reason for national governments to interfere in the free interplay of market forces? How can the government affect the exchange rate? The course aims to provide a basic understanding of these issues. It will allow you to take a fresh look at many developments in the world, such as the debate on the benefits of opening up the world to international trade, the role of multinational enterprises in the world economy, the effect of the recent expansionary monetary policy (Quantitative Easing) by the European Central bank, the consequences of the Brexit, and the role of international financial institutions like the World Bank and the International Monetary Fund.
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A basic understanding of economics is required, for instance first year economics courses like Foundations in Economics or Introduction to Economics, and/or Micro- and Macro Economics.
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Written exam + assignment. The assignments could lead to bonus points that will be added to the unrounded grade for your exam (provided your exam grade is 5.0 or higher). Bonus points from previous years are no longer valid for other years.
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| The lectures will be recorded and be made available as weblectures for a limited period of time after the lecture has taken place and then again some time before the exam. WG meetings and feedback meetings will not be recorded. |
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