International Trade and Investment
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- Term 1
This module will provide: i) an analytical training in the critical use of theories of international trade and investment; and ii) an opportunity for students to develop critical understanding of the current policy debate on international trade, investment and economic development.
Throughout the module, emphasis is placed on understanding theories as well as on testing and evaluating the theoretical propositions in the light of empirical evidence and real world issues. While the module is formally structured with two hours lectures and one hour tutorial/seminar class per week, although the format is flexible and the lecture will be interactive. The purpose of lectures is to introduce theoretical models and propositions, and to relate these to 'real world' issues. The prime objectives of the lectures is to present a critical expositions of "pure theories of international trade" (classical, neo-classical, new theories of trade) with regard to the trade and investment patters and its implication for growth and income distribution; political economy of protection; welfare analysis of trade policies; economics of regional integration and factor mobility and others. The seminars will have presentations by lead discussants of selected papers or book chapters on specific selected, followed by class discussion. In tutorial seminars policy-related topics are selected to discuss real world issues and to assess critically the relevance of various theoretical propositions for practical issues facing the global developing community such as interface between trade, foreign direct investment (FDI) growth and development, the characteristics and effects of globalisation, including the globalisation-growth-income inequality-poverty nexus, multinational corporations and foreign derect investments; forces and arrangements of regional integration and multilateral arrangements (GATT and WTO); international migration and labour markets.
Objectives and learning outcomes of the module
On successful completion of the course, students will be able to:
- Identify and analyse different theoretical models of international economics in light of ‘real world’ situations.
- Assess the impact of the economies of regional integration and multilateral arrangements
- Critically evaluate the character and effect of globalisation, including the globalisation-growth-income poverty nexus.
Method of assessment
Assessment weighting: Exam 70% / Coursework 30% (1 essay). All coursework is resubmittable.
While the comprehensive reading list will be provided for each topic covered in the course below and separately for each tutorial seminar week by week, a basic exposition of standard theories can be found in a number of text books popularly used in International Economics courses such as (technical tutorial classes are organized to help students to acquire these analytical skills in detail):
- International Trade: Theory and Evidence by Markusen James R. et al (1995), McGrow-Hill Inc.— covers aspects of international trade only - M&MKM
- Foundations of International Macroeconomics by Obstfeld Murice and Kenneth Rogoff (1998), MIT Press - covers aspects of international finance and open macroeconomics only - O&R
In addition, you may find it useful to consult the following reference books for specific topics:
- Jones Ronald W. and Peter B. Kenen eds (1984), Handbook of International Economics, North-Holland, 2 volumes
- Grossman Gene and Kenneth Rogoff eds (1995), Handbook of International Economics, Volume 3, North-Holland
- Handbook of Development Economics I, II and III, North-Holland
- Greenaway David and Alan Winters eds (1994), Surveys in International Trade, Basil Blackwell, Oxford
- UNCTAD: Trade and Development Report: Recent Issues
- UNCTAD: World Investment Report
- UNCTAD: The Least Development Countries Report
- World Bank: Global Financial Development
- IMF: World Economic Outlook
Those who have not previously followed an undergraduate course in International Economics may find the following introductory textbooks useful.
- World Trade and Payments: An Introduction, Seventh Edition, by Richard E. Caves, Jefferey A. Frankel and Ronald W. Jones, Addison Wesley Longman (1999), a good all round undergraduate textbook - C&FJ
- International Economics: Theory and Policy, Fourth Edition, by Paul R. Krugman and Maurice Obstfeld, Addison Wesley Longman — a popular undergraduate textbook in North America on the subject - K&O;
- The World Economy: A Textbook in International Economics, by John Williamson and Chris Milner: Harvester/Wheatsheaf (1991) — a non-technical textbook focused on development issues - W&M
- Development Macroeconomics by Pierre-Ricard Agenor and Peter J. Montiel, Princeton University Press