|Semester 1 Credit Value:||10|
The module should provide an understanding of:
1. The determinants of international trade, including the implications of imperfect competition
in international markets;
2. The cases when a protectionist policy towards international trade may be appropriate;
3. The fundamental determinants of the balance of payments and exchange rates;
4. Alternative exchange rate arrangements and international policy co-ordination.
The aim of the module is to familiarise students with issues and models that underpin international trade theory and the determination of exchange rates. In the first half of the module, simple models will be developed that focus on key issues that help explain the existence of trade, such as comparative advantage and resource availability; consideration will also be given to the implications of the use of policy instruments, such as quotas, tariffs or subsidies. The second half of the module considers flexible and sticky price models of exchange rate determination in a world of either fixed or floating exchange rates. The responses of the economy to policy initiatives differ in these alternatives paradigms and these will be considered together with the issue of currency crises and optimal currency areas.
Lecture 1 – Introduction to International Trade Theory and Trade Organisations. The Ricardian Model.
Lecture 2 – The Specific Factors Model
Lecture 3 and 4 – The Heckscher-Ohlin Model
Lecture 5 – The Standard Trade Model
Lecture 6 – Imperfect Competition and Modern Trade Theory
Lecture 7 – Tariffs, Subsidies and Quotas and Welfare
Lecture 8 – Exchange Rates, National Income Accounting and the Balance of Payments
Lecture 9 – An Asset perspective on Exchange Rate determination
Lecture 10 – The Flexible Price Model
Lecture 11 – The Sticky Price Model
Lecture 12 – Fixed and Floating Exchange Rate regimes
Lecture 13 – Managed Floats, currency crises and policy issues
Lecture 14 – Optimum Currency Areas
1. An understanding of the importance of international trade, what motivates it and the problems caused by political restraints
2. An understanding of how exchange rates are determined and managed
Applications of economic reasoning to international trade and analysis of exchange rate management issues
|Graduate Skills Framework Applicable:||Yes|
|Guided Independent Study||Assessment preparation and completion||1||32:00||32:00||N/A|
|Scheduled Learning And Teaching Activities||Lecture||14||1:00||14:00||N/A|
|Guided Independent Study||Directed research and reading||1||25:00||25:00||N/A|
|Scheduled Learning And Teaching Activities||Small group teaching||4||1:00||4:00||N/A|
|Guided Independent Study||Independent study||1||25:00||25:00||N/A|
* lectures provide an overview of the main topics and their treatment in the current literature.
* seminars provide students with an opportunity to reinforce learning and monitoring progress by solving problems related to the issues raised in the lectures.
The format of resits will be determined by the Board of Examiners
The unseen exam is designed to encourage study and test knowledge over the full-range of subject areas.
Original Handbook text:
Note: The Module Catalogue now reflects module information relating to academic year 15/16. Please contact your School Office if you require module information for a previous academic year.
Disclaimer: The University will use all reasonable endeavours to deliver modules in accordance with the descriptions set out in this catalogue. Every effort has been made to ensure the accuracy of the information, however, the University reserves the right to introduce changes to the information given including the addition, withdrawal or restructuring of modules if it considers such action to be necessary.