The International Trade module aims to provide students with a sound understanding of the method, content and scope of International Trade, a basic knowledge of the world trading system, and an appreciation of current trade policy issues.

A    Knowledge and Understanding:

• understand the pattern of world trade, and the institutions and rules of the world trading system
• understand the main models of international trade and how they can be applied to the analysis of trade policy
• understand and know about current trade policy issues
• understand the implications of empirical tests of international trade models

B    Intellectual Skills: 

• apply general equilibrium analysis from microeconomics to the analysis of international trade problems
• use models of imperfect competition and basic game theory to analyse international trade
• compare different models of international trade and assess their validity in terms of coherence of the theory and the empirical evidence

C    Discipline Specific Skills: 

• derive the key results of the main international trade models and use them to analyse trade policy issues
• analyse and assess the positive and normative implications of trade policy
• assess the arguments about free trade and protectionism

D    Transferable Skills: 

• listen to and read the economic literature, from journal articles to newspaper commentaries
• write coherently on major economic issues
• work independently on economic problems, managing their time and resources efficiently
• operate in small groups, sharing ideas and reaching collective views
• develop logical arguments and make sensible decision as to their value
• deliver lucid presentations on economic research and current policy

Teaching will consist of 36 hours of lectures and 9 hours of tutorials. Lectures are used to identify the main issues and to present the analytical models of international trade and trade policy. Tutorials are used for students to apply the models to the solution of analytical problems in international trade, and to discuss policy issues and empirical research.

Indicative study hours:   200

One 2 hour examination at the end of the Autumn semester (30%) and a 3 hour examination at the end of the Spring semester (70%)

Introduction to International Trade:overview of international trade. Conventional Trade Theories:mercantilism; absolute advantage; comparative advantage and the gains from trade; the neoclassical model, offer curves and the terms of trade; the Heckscher-Ohlin-Samuelson model (Heckscher-Ohlin, Rybczynski, Stolper-Samuelson and factor-price equalisation theorems). Imperfect Competition and International Trade: intra-industry trade; international trade under oligopoly; product differentiation, economies of scale and monopolisitic competition. Empirical testing of trade theories. Trade policy: history and principles of the GATT and the WTO. Analysis of Trade policy: tariffs, export taxes and subsidies in a small country; tariffs in a large country and the optimum tariff argument; domestic distortions and the theory of second-best; quotas and voluntary export restraints; dumping and anti-dumping duties. Strategic Trade Policy: rent-extracting tariffs and profit-shifting export subsidies. Economic Integration: the theory of customs unions; the Kemp-Wan proposition; trade blocs and regionalism. Growth and Trade: economic growth and the terms of trade.  International Factor Movements: capital mobility and the migration of labour.  Multinationals and Foreign Direct Investment: Ownership, Location and Internalization; oligopoly models of multinationals and FDI.

H.P. Bowen, A. Hollander and J-M Viaene, Applied International Trade, 2^nd Edition, Palgrave, 2012.
D.R. Appleyard, A.J. Field and S.L. Cobb, International Economics, 7^th Edition, McGraw-Hill, 2009
J.R. Markusen, J.R. Melvin, W.H. Kaempfer and K.E. Maskus, International Trade: Theory and Evidence, McGraw-Hill, 1995.