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2010/2011  BA-IE  International Economics

English Title
International Economics

Course Information

Language English
Point 7,5 ECTS (225 SAT)
Type Mandatory
Level Bachelor
Course Period
Time Table Please see course schedule at e-Campus
Study Board
Study Board for BSc in International Business
Course Coordinator
  • Battista Severgnini - Department of Economics
Main Category of the Course
  • Economics, macro economics and managerial economics
Last updated on 29 maj 2012
Learning Objectives
After having attended the course the students should be able to:
  • Explain basic terminology from International Economics (e.g. comparative advantage, factor abundance, factor intensity etc.) in a comprehensive and intuitive way.
  • Describe and rationalize the main assumptions behind trade models such as the Hechscker-Ohlin model, the Ricardian model, imperfect competition models.
  • Perform policy experiments (e.g. introducing tariffs).
  • Illustrate diagrammatically these models and perform analysis of the pattern of trade, gains of trade and effect on the income distribution from free trade.
  • Solve algebraically simple trade models (e.g. imperfect competitive models) in order to determine the equilibrium economic variables (e.g. price, average costs, quantity, profit etc).
  • Describe and rationalize the main assumptions behind the main models of Open Economy Macroeconomics, such as models based on PPP, the uncovered interest parity etc.
  • Illustrate diagrammatically these models, perform policy experiments (like changing the Money Supply) and interpret verbally what happens when moving from one equilibrium to another.
Assessment Written Exam
Marking Scale 7-step scale
Censorship Internal examiners
Exam Period May/June and August
Aids Closed Book
Duration 4 Hours
Prerequisites for Attending the Exam
Course Content

The aim of the course is to enable the students to understand and explain the determinants of international trade and monetary economics. Moreorver, the students should understand the scope for economic policy in open economies and the role played by institutions.
This course offers a detailed introduction to international economics. The first part of the course deals with International Trade Theory providing the tools necessary for an analysis of the “real” economic variables (relative prices as well as the amount of goods produced, consumed and traded). We will develop an analytical framework for studying international trade to answer the question ‘Why do nations trade?’ Furthermore, we use the analytical framework to examine direct investment and policies that government adopts toward international trade.
In the second part of the course the focus is on the “monetary” variables (the overall price levels measured in different currencies, the money supply, interest rates, inflation and foreign exchange rates). We develop a theoretical framework that allows us to understand the interaction between “monetary” and “real” variables. We study the balance of payment concepts, nominal and real exchange rates, how monetary policy affects nominal exchange rates and finally the link the nominal exchange rate and output determination in an open economy in the short and the long run. Moreover, we analyze a brief history of the international monetary system and of the single European currency.