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SCHOOL OF BUSINESS, ECONOMICS, AND COMMUNICATIONS
DEPARTMENT OF ECONOMICS
ECON: 403
Spring 2013Dr. Rasha Abdel-Hakim
Course Objectives:
The subject of International economics deals with the economic
relations among
nations. It analyzes the patterns and consequences of trade in
goods and services and
the financial transactions between a nation and the rest of the
world as well as the
policies that govern these activities. The importance of this
subject has been growing
with the rapid globalization that the world is experiencing. The
current opportunities
and challenges faced by nations around the globe can be best
analyzed using the tools
of international economics.
Course Requirements:
Each class will be composed of a lecture explaining the
theoretical framework
followed by discussions on the practical applications. Graphs
will be used
extensively. Students are strongly urged to engage actively in
the class
discussions.
Students will be required to write a research paper comparing
between two
countries analyzing their trade sector in terms of performance,
policies,
prospects and challenges. Students should base their analyses on
thetheoretical foundations discussed during the course. Students
will be required
to present a summary of their paper to the class.
There will be two exams: a mid-term exam and a final exam
The final grades will be based on the following:
Mid term exam 30%
Attendance and participation in class 10%
Paper and presentation 30%
Final exam 30%
Textbook and Readings:
Dominick Salvatore,International Economics, tenth edition
published in 2011.
Other readings will be put on reserve
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COURSE OUTLINE
I. THE PURE THEORY OF INTERNATIONAL TRADE
The Mercantilist Philosophy
Theory of Absolute Advantage: Adam Smith
Theory of Comparative Advantage: David Ricardo
The Modern Theory: Basis for Trade and Gains from Trade
The Heckscher-Ohlin Theory and Factor Endowments
Economies of Scale and Imperfect Competition
Economic Growth and International Trade
II. INTERNATIONAL TRADE POLICY
1. Tariff Policy: Partial Analysis
Nominal versus effective tariff rate
General equilibrium Analysis
The Optimum Tariff
2. Non-Tariff Barriers:
Import Quotas
Comparison between tariffs and quotas
Export subsidies
III. ECONOMIC INTEGRATION:
World Trade Organization Rules
The Theory of Custom Unions
Cases of Economic Integration
IV. THE BALANCE OF PAYMENTS AND FOREIGN EXCHANGE:
Introduction to the balance of payments
Foreign exchange rates Devaluation
Balance of Payments Adjustments
V. THE CASE OF EGYPT
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