International Trade and Finance

Students examine the theories, policies, and instruments (e.g., tariffs, quotas, V.E.R.’s) of international trade and consider trade integration. Course content also focuses on the foreign exchange market and balance of payments in international trade. Macro policies in open economies, such as flexible exchange rates and the nature of world money, are examined. Theories and policies of foreign direct investment are considered.

PREREQUISITES

• ECON 2020: Principles of Microeconomics
• ECON 2030: Principles of Macroeconomics
• BUSN 2750: Introduction to Statistics

READINGS

Krugman, P. R., & Obstfeld, M. (2015). International Economics: Theory and policy. 10th Edition. Boston: Pearson Addison-Wesley.

LEARNING OUTCOMES

• The student understands the concept of comparative advantage and can apply it to interpersonal interactions, division of labor, and international transactions.
• The student can apply the Factor Proportions Theory (i.e. Hecksher-Ohlin Model) to a two-country, two-input, two-good model so as to explain the direction of trade.
• The student can describe the economic incidence of change in international trade flows both within and across countries.
• The student can describe the economic incidence of the different forms of trade restrictions (e.g. tariffs, quotas, and subsidies).
• The student can predict the effect of a change in international transactions on flexible exchange rates.
• The student can explain why fixed exchange rates, autonomous monetary policy, and free capital mobility are incompatible.
• The student can use Purchasing Power Parity, Relative Purchasing Power Parity, and Interest Rate Parity to describe appropriately, under-, and over-value exchange rates.

COURSE POLICIES / ADDITIONAL INFORMATION

• Attendance is recorded. Unexcused absence lowers the grade accordingly.
• It is the students' responsibility to check Canvas and their Webster email regularly.
• For every hour spent in class it is expected of the students to invest 3 hours per week outside of class in homework, reviewing material, assignments, etc.

UNIVERSITY POLICIES

Students are required to inform themselves of WUV academic policies.

A full list of these policies is available on the WUV website: http://webster.ac.at/academic-policies