Core-12 International Economics (2024)

Course started on 9th August,2024

Course Completed on 7th December,2024

Attendance

Question Paper - 2019,2020 , 2021 , 2022  

Syllabus: Unit wise course content distribution 

Unit -1 Introduction of International Economics -  Basis of Trade – gains from trade   Notes 

Unit-2  Theories of International Trade - Adam Smith -Absolute Cost Advantage theory (follow class notes), The Ricardian comparative cost advantage theory.   

 Presentation-23rd & 24th September, 1 pm

Class task 1.1  - Submission Link  (Submit by 4th Aug, 10 pm)

Class task 1.2 Submission Link (Submit by 26th Aug, 10 pm)

Videos

1. Introduction to Classical trade theory and Adam Smith Absolute Cost Advantage Theory

2. Ricardian Theory of Trade - Pre-trade (Lecture-1)

3. Gain from Trade- Ricardian Trade Model (Lecture-2)

4. Determining terms of trade in Ricardian trade Model (Lecture- 3)

5. Concluding Ricardo Model (Lecture-4)

Notes

1. Comparative Cost Advantage (Barter ToT Explanation)

2. Comparative Cost Advantage (Opportunity Cost Representation)

3.  Terms of Trade determination in the Ricardian Model

4. Can Equilibrium ToT determine in Ricardo Theory? 

5. No Comparative advantage and trade, Doctrine of CA and UDC's

Question Bank

Additional Readings

Readings

1. An Introduction to International Economics with a view on Classical thinking on trade

2. The Law of Comparative Advantage - Salvatore

3. Comparative Advantage- Krugman

4. Criticism of Comparative advantage

The H-O Model-assumptions-Comparative advantage in H-O Model- Physical definition explanation of factor abundance 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 theorem, Stolper-Samuelson Theorem- gains from trade and income distribution in free trade, factor intensity reversal and factor Prices-Leontief paradox, Rybczynski theorem, Demand Reversal.

Completed On 21st September - Class task submission link -  submit by 10 pm, 22nd September

Readings, Notes (H-O Model)

Heckscher Ohlin Model  Reading - Salvatore , Krugman , Giancarlo Gandolfo

1. Lecture 1&2 - Heckscher Ohlin Model-Introduction and Model Development

2. Lecture 3 - Heckscher Ohlin Model-Physical definition and determining CA

3. Lecture 4.1- Heckscher Ohlin Model-Price definition, ---Physical vs Price Criteria

4. Lecture 4.2- Comparison CA (HO & Ricardo)

5. Lecture-5-Demand Reversal 

6. Lecture 6 - Heckscher-Ohlin-Samuelson Theorem 

7. Lecture 7- Leontief Paradox

8. Lecture-8- Factor Intensity Reversal

9. Lecture-9- Rybcynski Theorem 

10. Lecture 10- SST-Free trade and Income Distribution (21/09/24)               

Tariff part argument added to SST to connect with unit 3.

Unit -3. Trade Intervention Theory -  Offer Curve, Metzler Paradox, Tariff and income distribution – tariffs terms of trade and domestic prices, tariffs and national income, the optimum tariff, Tariff - Small and Large Country case- Various effects of tariffs – 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.

Submission Link Class task Unit 3- Submit by 8th November, 2024

1. Lecture 1 - SST with Tariff ( Tariff and income distribution)-Notes

2. Lecture 2 - Offer curve, Metzler Paradox and Criticism of SST - Notes

3. Metzler Paradox - Video, Notes

4. Tariffs and National Income - Video, Notes

5. Optimal Tariff - Video, Notes

6. Welfare effect of Tariff Small Country Case-Notes 

7. Welfare effect of Tariff Large Country Case - Notes, Video

8. Quota and its various effect, Equivalence of quota & tariff under static Market condition. -Video

9. Non Equivalence of quota & tariff under Changing Market condition - Notes, Video

10. Infant Industry Argument- Notes

11. International reserves and liquidity Problem and solution - Notes

 Unit -4. Balance of Payments and Problems of Adjustment - The mechanism of adjustment under fixed exch. Rates – automatic adjustment under Gold Standard- expenditure reducing policies and Expenditure switching policies –devaluation, the elasticity approach (Marshall Lerner Condition) 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.

Submission Link Unit-4 Class task, Submit by 15th Dec, 2024

Notes - Fixed Exchange rate - automatic adjustment mechanism

Flexible exchange rate system Part 1

Merits and Demerits of Flexible Exchange rate system Part 2 

References/ Suggested Readings 

Krugman, Obstfeld and Melitz: International Economics: Theory and Policy, 10th Edition, Pearson.

 Salvatore: International Economics: Trade and Finance, 11th Edition, Wiley India Pvt. Ltd. 

D.M Mithani: International Economics, 8th Edition, Himalaya Publishing House. 

Soderstein and Reed: International Economics, 3rd Edition, Palgrave Macmillan. 

M.L Jhingan: International Economics, 7th Edition, Vrinda Publications Pvt. Ltd

Continuous Assessment 2022 Batch (Internal Exam): 15 Marks

1. Attendance - 05 marks

§   attending less than 60 % - 0 marks

§   attending at least 60% but less than 75% - 03 marks

§   Students with over 75% but less than 90% attendance - 04 marks 

§   With 90% attendance and more - 05 marks

2. Class Tasks/Homework 05 marks – distributed among various units

Unit 2 =  2 marks, Unit 3 & 4 = 1.5 marks each

3. Exam- Subjective/Objective type - 05 marks

4. Incentive marks- 05 marks

Class participation, active involvement in department activities, presentation etc

End Semester Examination: 35 Marks 

The end semester examination shall be conducted based on written test.

Question Pattern: Students have to answer 01 question carrying 10 marks out of given 03 questions

02 questions carrying 5 marks each out of given 05 questions;. 

05 questions carrying 2 marks each out of given 08 questions; 

05 questions carrying 1 mark each out of given 08 questions.