Programme Outcome (PO)
Course Completed on 20th December 2021
The aim of this paper is to provide students with a strong foundation in the principles of international economics which will help them to know the trade policies at the national and international levels and the impact of globalization on income, employment, and distribution of income in the current international scenario. The paper on international economics includes classical and modern theories of international trade. It familiarizes students on trade policies on the one hand and on the other hand, introduces open economy macroeconomics dealing with exchange rate determination in presence of ‘expectation’ and different policies to maintain stability on the external front. Studying this paper gives learners an opportunity to understand and analyse real-world trade related issues. In post graduate programme in Economics students find it easier to understand the advanced course in International economics having their strong foundation attained through this course.
Started 23rd August 2021
Internal Criteria - Attendance 2 marks, 75% + Internal Exam 8 marks + 2 Incentive marks for Presentation and Class participation
Question Paper - 2020 , 2019, 2021
1. Introduction
Basis of Trade – gains from trade
Lecture 1 - Basis and Gain from trade - Notes
2. Theory of Trade
Adam Smith -Absolute Cost Advantage, The Ricardian theory – generalization of Ricardian model- the H-O Model- Physical and Price definition explanation of factor abundance, comparison of Comparative Advantage in the two ( HO and Ricardo). Commodity and Factor prices under trade- factor price equalization , Stolper-Samuelson Theorem, factor intensity reversal and factor Prices-Leontief paradox, gains from trade and income distribution. Rybczynscki theorem, Demand Reversal, Offer Curve
(For underline section Video is provided also)
Reading
The Law of Comparative Advantage - Reading1 Salvatore
An Introduction to International Economics with a view on Classical thinking on trade
Criticism and Conclusion of Comparative Cost Advantage
Heckscher Ohlin Model Reading - Salvatore , Krugman
Video Lecture
Introduction and Absolute cost advantage theory
Ricardian Theory of Trade - Pre-trade (Lecture-1)
Ricardo Model Numerical- not recorded
Gain from Trade- Ricardian Trade Model (Lecture-2)
Determining terms of trade in Ricardian trade Model (Lecture- 3)
Concluding Ricardo Model (Lecture-4)
Additional Video
Stolper Samuelson theorem (free trade)
Factor intensity reversal, video pdf
Leontief Paradox/Empirical Test of Heckscher Ohlin Model
Demand Reversal & Comparison of CA in Ricardo and HO.
Offer Curve , video pdf , l
3. Trade Intervention
Theory of Tariff and income distribution – tariffs, terms of trade and domestic prices, Metzler Paradox, tariffs and national income, the optimum tariff, other effects of tariffs – Small and large country case- quotas and quantitative trade restrictions -effects of quotas and quantitative trade restrictions and balance of payments- trading state, the infant industry argument. Problems of international reserves and liquidity and of development finance.
SST(with Tariffs) and Metzler Paradox - pdf
Tariff and Income distribution-Summary
Tariffs and National Income- Jpg
Effect of tariffs- Small Country case and Large Country case- Reading 1 , 2, 3
Various effects of Quota , Are quota & tariff equivalent in their Economic impact
The Choice between Import Tariffs and Quotas- Under Changing market condition, Reading
Infant Industry Argument, Reading
Problems of international reserves and liquidity-covered offline
4. Balance of Payments and Problems of Adjustment - covered offline
• The mechanism of adjustment under fixed exchange Rates – automatic adjustment under Gold Standard- expenditure reducing and Expenditure switching policies –devaluation, the elasticity and absorption approaches – direct controls- mechanism of adjustment under flexible exchange rate and uncertainty, speculation and the stability of exchange rate and inflation- costs and benefits of flexible exchange rates.
Measure to Correct Disequlibrium in the BOP
1. Soderstein, Bo: International Economics, 2ndEdition
2. Kennen, P: International Economics
3. Caves, Frankel and Jones: World Trade and Payments
4. Krugman and Obstfeld: International Economics
Class task 1 Submission Link - 25th August, 2 pm
Class task 1.2 Submission link -28th August 2 pm
Extra- HO
Core Paper 12 International Economics, Date of Exam: 11/01/2022 (Tuesday, 2 pm to 4 pm, 30 minutes extra for creating pdf, renaming pdf and submission in Google form), Submit before 4.30 pm. Marks will be deducted for late submission
Rename pdf - < Your Name, C-12, Registration number>
Submission Link
https://docs.google.com/forms/d/e/1FAIpQLSdI8X8UISvCr97n2q3ooZp_yw0brS3Hk4R1FVMJg2MW4gmXtQ/viewform
After submission check the submission successful message for confirmation. In case you face difficulty in submission then by 4.15 pm send one copy of answer script in WhatsApp and most importantly email me at sssir2021batch@gmail.com
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