Course syllabus - International Trade Theory

Objectives

The aim of the course is to understand and analyze how the global economy works from an aggregate perspective, and how an open economy functions and interacts with the rest of the world by international trade, international financial flows and currency exchange. Aggregate economic methods are used to analyze how the business cycle and stabilization policy relate to trade and monetary flows in an international setting, and how these contribute to the determination of interest rates and exchange rates.

Learning outcomes

After completing the course, the student should be able to
- describe and explain how international and domestic markets for goods, services, capital, credits and currency interact in economic models of open economies as well as the global economy modeled as a closed economy
- identify important variables such as production, price level, employment, interest rates, and exchange rates over the business cycle in such economies
- describe how these variables are connected and depend on international trade relations
- analyze how exogenous changes to the economy influence the development of the business cycle in an open economy and in the global economy
- analyze how changes in the global economy influence the development of the business cycle in an open economy
- compute central variables such as GDP in simple macroeconomic business cycle models of the global economy or a small open economy
- describe the aims and means of economic policy, such as stabilization policy, and how these depend on the international economic environment
- compute the effects of economic policy, particularly fiscal and monetary policy, on the domestic economy as well as its trading partners, in simple models

Course content

International economics treats the working of the economy with a particular emphasis on the international economic relations between countries, such as international trade in goods and services, international financial markets and currency markets. It also considers the development, on the aggregate level, of wider areas of economic activity such as the EU, or the world as a whole. The course uses the basic macroeconomic concepts and measures of economic activity such as the national accounts for GDP, consumption, investment, imports, exports and international financial transactions, and measures for unemployment, inflation etc. to analyze the development of the domestic and international economy, with an emphasis on the short time horizon. These concepts are used to analyze how the trade balance and monetary flows develop over the business cycle, and the adjustment of the global economy towards long run equilibrium. Markets of special importance for the international economy, such as international markets for goods, services, capital, and currency, are covered. International trade and international finance are treated with an emphasis on the perspective of a small open economy such as Sweden. Economic stabilization policy is discussed in terms of goals, means and effects, as well as the interaction between fiscal and monetary policy in an international setting.

Tuition

Teaching is conducted in the form of lectures and applied demonstrations and exercises. The demonstrations and exercises, which focus on applying and solving economic models, may be held in connection with the lectures or as separate application sessions.

Requirements

Studies in Mathematics of 3 years from Upper Secondary School with a Science profile and a TOEFL test result, minimum score 575 with a TWE score of at least 4,5 (PBT) or 90 with a TWE score of at least 20 (iBT)/IELTS test result with an overall band score of minimum 6,5 and no band score below 5,5.

Examination

Exam (TEN1), written examination, 6 credits, grade Excellent (A), Very good (B), Good (C), Satisfactory (D), Sufficient (E), Insufficient, complementary work possible (Fx), Insufficient (F) 
Exercise (OVN1), 1.5 credits, grade Excellent (A), Very good (B), Good (C), Satisfactory (D), Sufficient (E), Insufficient, complementary work possible (Fx), Insufficient (F) 
 
All learning outcomes are examined by Exam and Exercise.

A student who has a certificate from MDU regarding a disability has the opportunity to submit a request for supportive measures during written examinations or other forms of examination, in accordance with the Rules and Regulations for Examinations at First-cycle and Second-cycle Level at Mälardalen University (2020/1655). It is the examiner who takes decisions on any supportive measures, based on what kind of certificate is issued, and in that case which measures are to be applied.

Suspicions of attempting to deceive in examinations (cheating) are reported to the Vice-Chancellor, in accordance with the Higher Education Ordinance, and are examined by the University’s Disciplinary Board. If the Disciplinary Board considers the student to be guilty of a disciplinary offence, the Board will take a decision on disciplinary action, which will be a warning or suspension.

Grade

Excellent, Very good, Good, Satisfactory, Sufficient, Insufficient, complementary work possible, Insufficient

Interim Regulations and Other Regulations

Overlap with NAA131 (4,5hp), NAA119 (3hp) and NAA133 (7,5 hp)