The methods and tools used in the analysis of international trade issues are provided. The course first reviews the subject's foundations, including the Ricardian theory of comparative advantage and the Heckscher-Ohlin general equilibrium model. It then goes on to examine international trade under more complex industrial structures, such as oligopoly and monopolistic competition. The effects of tariffs, and how as a consequence growth can be immiserising in an open economy, are considered. Rival explanations of the pattern of trade are discussed, together with measuring the gains from trade. While taking the student to an advanced level, in examining the neoclassical model for example, no previous knowledge of international trade theory is required. Presentation is largely diagrammatic rather than mathematical.
Method of assessment:
Problem-solving exercises (20%) and a 2-hour written examination (80%)