SEC6171 INTERNATIONAL ECONOMICS
Pre-requisite: None
BACKGROUND AND RATIONALE
Today, we live in a World that is characterised by globalization. This phenomenon is characterised by intensive exchange of resources (capital, people and finance) among entities located in different parts of the World. This is popularly known as international trade which is the exchange of resources at a given price.
Thus, international economics looks at the different models and theories that explain the economic rationale of conducting such an exchange. It provides the student with an insight into trade and finance models that students can use to formulate research issues pertaining to this international exchange and be able to provide policy recommendations to government and any institution interested. Basically, the course provides an analysis of the economic relationships between countries, covering both trade and monetary issues.
LEARNING OUTCOMES
By the end of the course, students should be able to:
1. discuss globalization and its impact on trade between countries;
2. compare and contrast trade between developed and developing countries;
3. Evaluate and understand how trade can facilitate economic development of any countries;
4. discuss how economic integration can be an effective way of allowing growth and the impact of regional organizations like EU, NAFTA, SADC, ASEAN and similar organizations;
5. analyse any economy’s using the economic growth model by looking at the balance of trade and provide policy recommendation;
6. discuss the impact of the free movement of resources, (especially financial) on the economic situation of many countries;
7. evaluate the impact on the global economic situation of the three most important multilateral organizations: IMF, World Bank and WTO; and
8. discuss the causes and analyse the impact of any financial crisis.
COURSE CONTENT
PART A: International Trade Theory
1. World Trade: An Overview
2. Comparative Advantage and Labor Productivity
3. The Ricardian Model
4. Resources and Trade: The Heckscher-Ohlin Model, Stolper-Samuelson Effects and Rybczynski Effects
5. External Economies of Scale and the International Location of Production
6. Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises
Part B: Market Imperfections and Trade
1. Imperfect Competition and Trade
2. Externalities and Protectionism
Part C: International Factor Movements
1. International Labor Mobility
2. International Capital Flows
3. Multinational Firms and Foreign Direct Investment
Part D: Tariffs and Non-Tariff Barriers to Trade
1. Economics of Tariffs
2. Economics of Quotas
3. Protectionism and Imperfect Competition
Part E: Government Intervention in Trade
1. Welfare Arguments
2. Income Distribution
3. Optimum Tariff
Part F: Strategic Trade Policies
1. Technology and Externalities
2. Imperfect Competition and Protectionism
3. Import Substitution and Infant Industry Argument
4. Export-oriented Development Strategies
5. Strategic Trade Policy
6. Median Voter Theorem
7. Theory of Collective Action
Part G: Exchange Rate Determination
1. PPP Approach
2. Asset Approach
3. Portfolio Balance Approach
4. Dornbusch Overshooting Model
5. Mundell-Fleming and AA-DD model
6. Exchange Rate Regimes and Stabilisation Policies
Part H: The International Monetary System
1. The Gold Standard and the Bretton Woods agreements. IMF.
2. Policy Coordination with Floating Exchange Rates.
3. Optimum Currency Area Theory. Single Currency and Economic Integration – the Euro.
Part I: International Capital Markets and Emerging Markets
1. The efficiency of international capital markets: theory and evidence
2. Problems of international banking
3. Problems of international finance for developing countries.
Part J: Financial and Economic Crises
1. Recent Financial Crises: Mexico 1994, Asia 1997 - 98, Russia 1998.
2. The Global Financial Crisis: 2008 - 09.
3. The IMF and Structural Adjustment Programs: Zambia 1986.
4. European Economic Crisis in 2010 - 15
METHOD OF TEACHING
The course is to be taught over two sessions per week:
Two and half hours of lectures and One and half hours of tutorial.
ASSESSMENT METHOD
Continuous assessment 40%
1 test 30%
1 assignment 10%
Final examination 60%
Total 100%
PRESCRIBED READING
1. Krugman P., Obstfeld M., and Melitz M. (2015). International Economics: Theory and Policy, (10th edition). Addison Wesley.
2. Markusen, J. R., Melvin, J. R., Kaempfer W. H. and Maskus K. E. (1995). International Trade: Theory and Evidence. New York: McGraw-Hill Inc.
RECOMMENDED READING
1. Appleyard, D. Field A. and S. Cobb. (2008). International Economics, 6th edition. New York: Macmillan.
2. Copeland, L. (2008). Exchange Rates and International Finance, 5th edition, London: FT Prentice Hall.
3. Feenstra, R. (2004). Advanced International Trade. Princetown: Princeton University Press.
4. Sodersten B. and Reed G. (1994). International Economics, (3rd edition). New York: Macmillan.
5. Stiglitz, J., (2002). Globalization and Its Discontents. New York: W.W. Norton & Company.
Pre-requisite: None
BACKGROUND AND RATIONALE
Today, we live in a World that is characterised by globalization. This phenomenon is characterised by intensive exchange of resources (capital, people and finance) among entities located in different parts of the World. This is popularly known as international trade which is the exchange of resources at a given price.
Thus, international economics looks at the different models and theories that explain the economic rationale of conducting such an exchange. It provides the student with an insight into trade and finance models that students can use to formulate research issues pertaining to this international exchange and be able to provide policy recommendations to government and any institution interested. Basically, the course provides an analysis of the economic relationships between countries, covering both trade and monetary issues.
LEARNING OUTCOMES
By the end of the course, students should be able to:
1. discuss globalization and its impact on trade between countries;
2. compare and contrast trade between developed and developing countries;
3. Evaluate and understand how trade can facilitate economic development of any countries;
4. discuss how economic integration can be an effective way of allowing growth and the impact of regional organizations like EU, NAFTA, SADC, ASEAN and similar organizations;
5. analyse any economy’s using the economic growth model by looking at the balance of trade and provide policy recommendation;
6. discuss the impact of the free movement of resources, (especially financial) on the economic situation of many countries;
7. evaluate the impact on the global economic situation of the three most important multilateral organizations: IMF, World Bank and WTO; and
8. discuss the causes and analyse the impact of any financial crisis.
COURSE CONTENT
PART A: International Trade Theory
1. World Trade: An Overview
2. Comparative Advantage and Labor Productivity
3. The Ricardian Model
4. Resources and Trade: The Heckscher-Ohlin Model, Stolper-Samuelson Effects and Rybczynski Effects
5. External Economies of Scale and the International Location of Production
6. Firms in the Global Economy: Export Decisions, Outsourcing, and Multinational Enterprises
Part B: Market Imperfections and Trade
1. Imperfect Competition and Trade
2. Externalities and Protectionism
Part C: International Factor Movements
1. International Labor Mobility
2. International Capital Flows
3. Multinational Firms and Foreign Direct Investment
Part D: Tariffs and Non-Tariff Barriers to Trade
1. Economics of Tariffs
2. Economics of Quotas
3. Protectionism and Imperfect Competition
Part E: Government Intervention in Trade
1. Welfare Arguments
2. Income Distribution
3. Optimum Tariff
Part F: Strategic Trade Policies
1. Technology and Externalities
2. Imperfect Competition and Protectionism
3. Import Substitution and Infant Industry Argument
4. Export-oriented Development Strategies
5. Strategic Trade Policy
6. Median Voter Theorem
7. Theory of Collective Action
Part G: Exchange Rate Determination
1. PPP Approach
2. Asset Approach
3. Portfolio Balance Approach
4. Dornbusch Overshooting Model
5. Mundell-Fleming and AA-DD model
6. Exchange Rate Regimes and Stabilisation Policies
Part H: The International Monetary System
1. The Gold Standard and the Bretton Woods agreements. IMF.
2. Policy Coordination with Floating Exchange Rates.
3. Optimum Currency Area Theory. Single Currency and Economic Integration – the Euro.
Part I: International Capital Markets and Emerging Markets
1. The efficiency of international capital markets: theory and evidence
2. Problems of international banking
3. Problems of international finance for developing countries.
Part J: Financial and Economic Crises
1. Recent Financial Crises: Mexico 1994, Asia 1997 - 98, Russia 1998.
2. The Global Financial Crisis: 2008 - 09.
3. The IMF and Structural Adjustment Programs: Zambia 1986.
4. European Economic Crisis in 2010 - 15
METHOD OF TEACHING
The course is to be taught over two sessions per week:
Two and half hours of lectures and One and half hours of tutorial.
ASSESSMENT METHOD
Continuous assessment 40%
1 test 30%
1 assignment 10%
Final examination 60%
Total 100%
PRESCRIBED READING
1. Krugman P., Obstfeld M., and Melitz M. (2015). International Economics: Theory and Policy, (10th edition). Addison Wesley.
2. Markusen, J. R., Melvin, J. R., Kaempfer W. H. and Maskus K. E. (1995). International Trade: Theory and Evidence. New York: McGraw-Hill Inc.
RECOMMENDED READING
1. Appleyard, D. Field A. and S. Cobb. (2008). International Economics, 6th edition. New York: Macmillan.
2. Copeland, L. (2008). Exchange Rates and International Finance, 5th edition, London: FT Prentice Hall.
3. Feenstra, R. (2004). Advanced International Trade. Princetown: Princeton University Press.
4. Sodersten B. and Reed G. (1994). International Economics, (3rd edition). New York: Macmillan.
5. Stiglitz, J., (2002). Globalization and Its Discontents. New York: W.W. Norton & Company.
- Lecturer: Dr. Richard Mulenga
Skill Level: Beginner