international economics lecture 1

Introduction to International Economics Traditionally divided into. I Trade (movement of goods and services). I International Finance (monetary flows and exchange rates). Lay strong foundations for I further studies in either area. I an understanding of (some of) the most important public discussions/issues/crises. Theory combined with empirics and links to recent/ongoing policy debates. I Several case studies Focus is not on methods, other practical applications, or soft skills.

The Big Questions in Trade.
 Patterns of trade: who trades what with whom?
Welfare effects of trade (both overall/average and inequality)
 Effects of (trade) policy (Potentially: shock propagation, capital flows etc.)

there have been two or maybe three waves of globalisation

The Grubel-Lloyd index for industry i is defined as one minus the absolute value of exports minus imports divided by exports plus imports.

Recent Mega-trends (we are only going to touch upon) Trade in tasks, offshoring and Global Value Chains (GVCs) Rise of China International service trade Trade policy (problems)

Outline 1st half-term AKA trade theory

1 Trade due to comparative advantage, (neo-)classical trade theory 1 The Ricardian Model
2 The Specific-Factors Model
3 The Heckscher-Ohlin Model
4 Trade due to increasing returns and love of variety, New trade theory AKA The Krugman Model
5 International Trade Policy

Today we will learn about Comparative Advantage and the Ricardian Trade model


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