Overview

This course develops a systematic exposition of models that try to explain the composition, direction and consequences of international trade and the determinants and effects of trade policy. It then builds on the models of open economy macroeconomics, focusing on national policies as well as international monetary systems. It concludes with an analytical account of the causes and consequences of the rapid expansion of international financial flows in recent years. Although the course is based on abstract theoretical models, students will also be exposed to real-world examples and case studies.

Syllabus

Week 1 Module 1 Introducing International Trade and Global Trade Module 2 Trade and Gains from Trade Module 3 Offer Curve and Terms of TradeWeek 2 Module 4 Offer Curve and International Equilibrium Module 5 Basis of International Trade Module 6 PPC, CIC and Trade EquilibriumWeek 3 Module 7 Gains from Trade and its decomposition Module 8 Absolute Comparative Cost Theory and its failure Module 9 Comparative Cost Advantage and RicardoWeek 4 Module 10 Gains from Trade and Ricardo Module 11 Role of Supply and Demand and Ricardo Module 12 World PPF and RicardoWeek 5 Module 13 Specific Factor Model Module 14 Non-Traded good and Dutch Disease Module 15 H-O Model- Part 1: Physical Definition and Price DefinitionWeek 6 Module 16 H-O Model- Part-II :Establishing the Proposition Module 17 Factor-Price Equalization Theorem Module 18 Factor Intensity and Intensity ReversalWeek 7 Module 19 Stolper-Samuelson Theorem Module 20 Rybczynski Theorem Module 21 New Trade Theory- I : Intra-Industry Trade and Monopolistic CompetitionWeek 8 Module 22 New Trade Theory- I : Increasing Returns to Scale and Trade Module 23 International Trade and Location of Firms Module 24 Outsourcing and MNCsWeek 9 Module 25 Instruments of Trade Policy: Free Trade and Protection Module 26 Import Tariff and Export Subsidies Module 27 Optimal Tariff and Metzler’s Paradox Module 28 Infant Industry ArgumentWeek 10 Module 29 Quotas and Non-Tariff Barriers Module 30 Political Economy of Trade Policy Module 31 Distortion and Immiserization Module 32 National Income Accounting in closed and open economyWeek 11 Module 33 Balance of Payment and National Income Accounting Module 34 Current Account Balance and Foreign Trade Multiplier Module 35 Exchange Rate Systems : Fixed and Flexible Exchange Rates Module 36 Balance of Payments and Exchange RatesWeek 12 Module 37 IS-LM Model and Balance of Payment Curve Module 38 International Monetary System Module 39 Financial Globalization Module 40 Financial CrisisWeek 13 Module 41 Trade and FDI interlinkages Module 42 Multilateral Approaches to Trade Policy Module 43 Issues in Trade Liberalization Module 44 Trade Indifference Curve and its derivationWeek 14 Module 45 Demand bias in Heckscher Ohlin model Module 46 Increase in factor supply in specific factor model Module 47 Applications of Neo-Classical Trade Models Module 48 Import tariff and Quota under Perfect and Imperfect CompetitionsWeek 15 Module 49 Balance of Payments Module 50 Intra Industry Trade and Gravity Equation Module 51 Sector wise trade patterns : A case study from Indian economy Module 52 Trade As An Engine Of Growth: Prospects In The Coming Decades