69966 - INTERNATIONAL ECONOMICS (B.A.)

Conoscenze e abilità da conseguire

At the end of the course students are able to analyze several issues related to macroeconomic policy in open economies and to the evolution of foreign exchange markets. Specifically, students are exsposed to the determination and dynamics of exchange rates, on the choice between flexible and fixed exchange rates, with special attention to the European Monetary Union, on the international role of the euro and its relationship with the dollar and, finally, on speculative attacks on currencies and the design of a new international financial architecture.

Contenuti

Course presentation: Contents, methodology, bibliography, exams.

Introduction to International Trade: International trade theory, current debates. Overview ofglobal trade in goods and services. Gross value vs. value added.

Classical Trade Theory:

• Adam Smith andabsolute advantages.
• Technological differences and trade specialization. Comparative advantages. Ricardian model with two goods and with a set of goods.

Working with international trade data: the Harmonized System. Trade in services in the balance of payments statistics. Trade Map.

International trade indicators: trade openness, revealed comparative advantages, trade concentration, trade complementarity, trade intensity, intra-industry trade.

Neoclassical Trade Theory:

• Heckscher-Ohlin Model: Factor endowment and intensity. Production in autarky and with trade. The HO theorem and the Stolper-Samuelson theorem, factor price equalization theorem, and income distribution.

• Specific factors model (Samuelson & Jones): International trade and income distribution.

• Neoclassical/standard trade model: Trade between countries with different productive structures or different preferences.

• Offer curves and terms of trade.

• Economic growth and trade: Sources of economic growth. Neutral and biased growth. Economic growth and international trade. The Rybczynski Theorem.

Alternative Theories of International Trade:
• Inter-industry trade and intra-industry trade

• Differences with neoclassical theory. Intra-industry trade.
• Delays in technology diffusion (Posner, Vernon)

• Monopolistic competition and trade

• Dumping and reciprocal dumping.

• External economies of scale and trade (Krugman)

• Demand-based approaches (Linder, Grubel).
• New economic geography: Introduction to localization theory. Introduction to gravity models (Tinbergen), Krugman and Venables models.

• Offshoring Model.

International factor movement:

• International labor mobility and migration.

• International borrowing and lending

• Types of internationalisation.

• FDI and multinational companies.

Trade policy:

• Definition. Aims. Most frequent instruments: definition, impact on domestic and international prices, output, consumption and trade.

• Tariffs (ad valorem, specific and compoud tariffs, effective protection rate). Tariffs in international trade agreements: trade creation and deviation.

• Trade quotas and tariff-rate quotas.

• Export subsidies.

• Export taxes and export quotas.

• Domestic support.

• Other trade policy measures (sanitary and phytosanitary measures, technical barriers to trade, labour and environmental standards).

• Public procurement, trade in services regulation, investment policy and trade, trade-related intellectual property rights.

• The political economy of trade policy. Free trade vs. protectionism.

First midterm (classes 1 to 10)

International trade negotiations

• The World Trade Organization (WTO). Multilateral negotiations. Past, present and future.

• International trade agreements: Different types of agreements. MERCOSUR. The European Union.

• Trade negotiations: from theory to practice.

National and international accounts:

• National accounts in an open economy.

• Balance of payments: Definitions and outcome.

Exchange rates:

• The basics of exchange rates.

• Nominal, real and effective exchange rates.

• The foreign exchange markets.

• Exchange rate systems.

Determination of exchange rates:

Model of Foreign Exchange Markets

• The demand of currency and other assets.

• The role of interest rates on currency deposits.

• The role of expectations of exchange rates.

• Interest rate parity (IRP)

• Money market and exchange rate in the short run.

• Money, inflation and exchange rate in the long run.

• Exchange rate overshooting.

Determination of exchange rates (cont.):

• Law of one price

• Purchasing power parity

• Long run model of exchange rates: monetary • approach

• Relationship between interest rates and inflation: Fisher effect

• Shortcomings of purchasing power parity

• Long run model of exchange rates: real exchange rate approach

• Real interest rates

Equilibrium in an open economy

• Output and the exchange rate in the short run.

• Determinants of aggregate demand in the short run

• A short run model of output markets (DD)

• A short run model of asset markets (AA)

• A short run model for both output markets and asset markets (DDAA)

• Effects of temporary and permanent changes in monetary and fiscal policies

Adjustment of the balance of payments over time

• Elasticity approach (the Marshall Lerner Condition). J Cuve.

Adjustment of the balance of payments over time

(cont.)

• Absorption approach.

• The monetary approach of the BOP.

Floating exchange rates:

• Arguments for flexible exchange rates

• Arguments against flexible exchange rates

• Foreign exchange markets since 1973

• Interdependence of large countries

Fixed exchange rates:

• Balance sheets of central banks

• Intervention in the foreign exchange markets and the money supply

• How the central bank fixes the exchange rate

• Monetary and fiscal policies under fixed exchange rates

• Financial market crises and capital flight

• Gold Standard. The Bretton Woods system.

Monetary integration

• Optimum currency areas and international policy coordination.

• The European experience of monetary integration.

n.

Testi/Bibliografia

General bibliography

• FEENSTRA, Robert C. & TAYLOR, Alan M. (2014)International Economics. 3^rd ed. Worth Publishers, New York. 1014 p. ISBN: 978-1-4292-7842-3 / FT (2014)
• KRUGMAN, Paul R.; OBSTFELD, Maurice & MELITZ, Mark J. (2012).Economía internacional: teoría y política.9a ed. Pearson, Madrid. 752 p. ISBN: 84-8322-8173 / KOM (2012)
• APPLEYARD, Dennis R. & FIELD, Alfred J. (1997).Economía internacional.4a ed. McGraw Hill, Madrid, 857 p. ISBN: 0-256-06701-4 / AF (1997)

  Specific bibliography

• ANTRÀS, P. (2020).Conceptual Aspects of Global Value Chains. Policy Research Working Paper; No. 9114. World Bank: Washington, DC. https://openknowledge.worldbank.org/handle/10986/33228
• ANTRÀS, P. (2024).The Uncharted Waters of International Trade. NBER Working Paper No. 33312. NBER: Cambridge. https://www.nber.org/papers/w33312
• BACCHETTA, M., BEVERELLI, C., CADOT, O., FUGAZZA, M., GRETHER, J. M., HELBLE, M. & PIERMARTINI, R. (2012). A Practical Guide to Trade Policy Analysis. United Nations and World Trade Organization: Geneva.
  Chapter 1: “Analyzing Trade Flows” https://vi.unctad.org/tpa/web/docs/vol1/ch1.pdf
  Chapter 2: “Quantifying Trade Policy”. https://vi.unctad.org/tpa/web/docs/vol1/ch2.pdf
• Beaton, k.; Cerra, v.; Hadzi-Vaskov, m. (2021). Trade, Jobs, and Inequality. IMF: Washington, DC. https://www.imf.org/en/Publications/WP/Issues/2021/07/01/Trade-Jobs-and-Inequality-461338
• DE GRAUWE, P. (1997). Economics of Monetary Union. Oxford University Press.
• EATON, J. & KORTUN, S. (2012). “Putting Ricardo to work” Journal of Economic Perspectives, 2012, vol. 26, issue 2, 65-90. https://www.aeaweb.org/articles?id=10.1257/jep.26.2.65
• EICHENGREEN, B. (2013). Does the Fed Care About the Rest of the World? NBER Working Paper No. 19405. NBER: Cambridge. https://www.nber.org/system/files/working_papers/w19405/w19405.pdf
• FRENKEL, R. (2003). “Globalización y crisis financieras en América Latina”. Revista de la CEPAL No. 80: CEPAL: Santiago. https://repositorio.cepal.org/handle/11362/10894
• GARCÍA, P.; LÓPEZ, A. & ONS, A. (2021). Las políticas hacia la inversión extranjera directa. BID-INTAL: Washington. Capítulo 1. “Inversión Extranjera Directa: motivaciones, estrategias, determinantes e impactos “ http://dx.doi.org/10.18235/0003016
• INTERNATIONAL MONETARY FUND (IMF) (2019). 2019 External Sector Report: The Dynamics of External Adjustment. Chapter 2. Washington: IMF. https://www.imf.org/en/Publications/ESR/Issues/2019/07/03/2019-external-sector-report
• IRWIN, D. (2019). Does Trade Reform Promote Economic Growth? A Review of Recent Evidence. Working Paper. Peterson Institute for International Economics (PIIE): Washington. https://www.piie.com/sites/default/files/documents/wp19-9.pdf
• KRUGMAN, P. (1998). What's new about the new economic geography?Oxford review of economic policy, vol. 14, no 2, p. 7-17. https://www.uzh.ch/cmsssl/suz/dam/jcr:00000000-15fd-7ade-0000-000030986b62/29.9.Krugman_-_Economic_geography.pdf
• LÓPEZ GONZÁLEZ, J. & JOUANJEAN, M.A. (2017), Digital Trade: Developing a Framework for Analysis, OECD Trade Policy Papers, No. 205, OECD Publishing, Paris, https://doi.org/10.1787/524c8c83-en .
• OMC (2015). Entender la OMC. 5ta edición. Ginebra. ISBN: 978-92-870-3750-3.https://www.wto.org/spanish/thewto_s/whatis_s/tif_s/understanding_s.pdf
• PAVLOVA, E.; FROHM, E.; GUNELLA, V. & de SOYRES, F. (2018). Global value chains and export elasticities: All linkages matter. VoxEU. https://cepr.org/voxeu/columns/global-value-chains-and-export-elasticities-all-linkages-matter
• PIERMARTINI, R. (2004). The Role of Export Taxes in the Field of Primary Commodities. World Trade Organization Discussion Paper.

  https://www.wto.org/english/res_e/booksp_e/discussion_papers4_e.pdf

• REDDING, S. (2024). Spatial economics. NBER Working Paper No. 33125. National Bureau of Economic Research: Cambridge, MA. https://www.nber.org/system/files/working_papers/w33125/w33125.pdf
• RODRIK, D. (2018), “What Do Trade Agreements Really Do?,” Journal of Economic Perspectives, 32 (2), 73-90.https://drodrik.scholar.harvard.edu/files/dani-rodrik/files/what_do_trade_agreements_really_do.pdf
• SKULLY, D. W., et al. (2001).Economics of tariff-rate quota administration. US Department of Agriculture, Economic Research Service. https://www.ers.usda.gov/webdocs/publications/47379/31994_tb1893d_002.pdf?v=42487
• STANTCHEVA, S. (2023). Understanding of Trade. NBER Working Paper No. 30040. National Bureau of Economic Research: Cambridge, MA. https://www.nber.org/system/files/working_papers/w30040/w30040.pdf
• VENABLES, A. J. (1999). Regional Integration Agreements: a force for convergence or divergence?World Bank policy research working paper, 1999, no 2260. http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2000/01/15/000094946_99122905343030/additional/105505322_20041117140510.pdf

Videos

• Edwards, Haley (2017). What global trade deals are really about (hint: it's not trade). TEDxMidAtlantic: Washington DC (Video): https://www.youtube.com/watch?v=-v3uqD1hWGE
• Peterson Institute for International Economics (PIIE) (2017). Why, After 200 Years, Can’t Economists Sell Free Trade? PIIE: Washington (Video):

  https://www.youtube.com/watch?time_continue=135&v=_9VHWjDg4lw

• Peterson Institute for International Economics (PIIE) (2018). How Trade Helps Each Side. PIIE: Washington (Video):

  https://www.youtube.com/watch?time_continue=111&v=6TeNgOGHEFc

  Podcast episodes

• Bown, C. (2022). “How poorer Americans ended up paying for US tariffs”. Trade Talks Episode 163. Peterson Institute for International Economics. July 19, 2022. https://tradetalkspodcast.com/podcast/163-how-poorer-americans-ended-up-paying-for-us-tariffs/
• Bown, C. (2023). “Moving workers across Europe”. Trade Talks Episode 197. Peterson Institute for International Economics. November 26, 2023. https://tradetalkspodcast.com/podcast/197-moving-workers-across-europe/
• Keynes, S.; Bown, C. (2021a) “Tackling climate change with a carbon border adjustment mechanism”. Trade Talks Episode 156. Peterson Institute for International Economics. July 25, 2021.

  https://www.tradetalkspodcast.com/podcast/156-tackling-climate-change-with-a-carbon-border-adjustment-mechanism/

• Keynes, S.; Bown, C. (2021b) “Europe’s trade policy and open strategy autonomy”. Trade Talks Episode 157. Peterson Institute for International Economics. September 27, 2021.

https://www.tradetalkspodcast.com/podcast/157-europes-trade-policy-and-open-strategic-autonomy/

Modalità di verifica e valutazione dell'apprendimento

Two written exams:

1st midterm: Contents from classes 1 to 10.
2nd midterm: Contents from classes 11 to 20.

 

1st full exam: Contents from classes 1 to 20.

2nd full exam: Contents from classes 1 to 20.

Strumenti a supporto della didattica

All course materials are available on MS Teams.

Orario di ricevimento

Consulta il sito web di Romina Eliana Gayà