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AECO 23A00 - Economics : International Trade and Finance

Type d'enseignement : Lecture and tutorials

Semester : Autumn 2018-2019

Number of hours : 48

Language of tuition : English

Pre-requisite

aucun

Course Description

Why do so many experts and observers worry about the current race for protectionism triggered by D. Trump? Is globalization detrimental to the middle class? Can we clearly say that Apple is an American brand, an American firm, an American product? Are Multinational Enterprises more powerful than many States? Should we regulate them? Will Trump's protectionism bring jobs back to the USA, or reduce wage inequality? Why is a positive trade balance associated with countries that save a lot? Does China use its exchange rate to boost its economy? Why are financial crises international? What builds the euro zone and makes it last or fail? The course intends to provide students with arguments to answer those questions. It offers the main concepts of an introductory course in international economics, both trade and finance. It introduces students to relevant empirical and theoretical issues of International Economics by keeping connected to contemporary issues raised by globalization.

Teachers

GUILLOU, Sarah (Chargée d'études - Economiste)

Pedagogical format

Lecture 1 Globalisation, Trade and International relations Why is trade the main vector of globalisation, why is it important? What drives the trade flows: the Gravity equation. Lecture 2 Global Firms and international organizations Who are the main actors of international economy? Lecture 3 Ricardian Models/ Competitiveness as a determinant of Trade Does Germany trade more because it is more competitive? Which country has a comparative advantage in what? Lecture 4 HOS Models/ Factors allowances as determinants of Trade Does China run manufacturing surplus because it has more workers? Is globalisation a cause of wage inequality? Lecture 5 New New Trade Theory: Heterogeneous Models Countries do not trade, Firms do. Lecture 6 Offshoring, International Division of Labor Does “made in a single country” make sense? Lecture 7 Unbalanced Trade – Trade Balance Is Trump economically right to blame surpluses' countries? What makes a country in a deficit or surplus position? Lecture 8 Finance Flows, the financial side of the Balance of Payments Lecture 7 FDI and Tax Competition How firms become global, what drives their location. How tax optimization disturb the balance of payment interpretation. Lecture 10 Exchange rate theories and policies Lecture 11 International Debt – International crisis The global financial market Lecture 12 Revisions

Course validation

The final exam constitutes 1/3 of the course grade, while the seminar grade constitutes the remaining 2/3 of the course grade. The seminar grade is made of homework (exercises, reading notes, summary of articles, summary of book chapter), presentation of homework in class. The seminar intends to make sure that the most important concepts are assimilated. It also challenges the student to teach the course's concepts themselves to the other students when presenting their homework. Hence an evaluation of their “teaching ability” will be included in the grade. During the 12 seminars, 3 main research questions, chosen at the beginning of the class, will be collectively investigated by using data. Participation in this research will be included in the seminar grade.

Required reading

  • Richard BALDWIN, The Great Convergence
  • Douglas A. IRWIN, Clashing over Commerce, a history of US trade policy, 2018
  • J. SACHS (2015), The Age of Sustainable Development

Additional required reading

  • P. Krugman, M. Obstfeld, M. Melitz, International Economics, Pearson 9th edition
  • Podcast Trade__ Talks from Chad Bown and Soumaya Keynes (to listen)