Syllabus International Economics
Content
BABES-BOLYAI UNIVERSITY CLUJ – NAPOCA Faculty of Economic Science and Business Management
Syllabus – International Economics
Year II, semester 4
Cluj – Napoca
Course identification Course name: International Economics Type: core class for International Business; elective for Accounting, Economic Informatics Prerequisites: General economic bases in Microeconomics, Macroeconomics and International Economic Transactions 2
Course objectives: Enabling students to understand and analyze the notions and processes specific to the international aspects of the economy. Course Content: Classical models of international trade and economic specialization 1. Absolute and comparative advantages 2. Standards model of international trade and economic specialization 3. The reciprocal demand curve and international trade equilibrium 4. Heckscher-Ohlin model – analysis and extensions Neo-classic and neo-technologic trade models 1. Scale economies, imperfect competition and international Technological differences model 2. Products life cycle model 3. Intra-industry trade Growth and international trade 1. Effects of growth on international trade 2. Sources of growth 3. Effects of growth in the case of a small vs. large economy Fundaments of international monetary relations 1. The Balance of Payments and its components 2. Monetary market 3. National income and national account. Trade multiplier 4. Macroeconomic policies in open economies
trade
Schedule 1. Week 1 Lecture – Absolute advantage model and comparative advantage model Basic concepts – absolute advantage, comparative advantage, interntational specialization Discussion – Characteristics of global economy 2. Week II Lecture – Standard model of international trend. Regional specialization. Trade advantages distribution Basic concepts – trade triangle, foreign exchange rate, export return rate Discussion – Practical applications and case studies on comparative advantage 3. Week III Lecture – Production factors and Heckscher-Ohlin model Basic concepts – price conversion, Stolper-Samuelson theorem, Leontief paradox Discussion – Determining international trade rates. Study and analysis of trade rate indicators 3
4. Week IV Lecture – Scale economy, imperfect competition. Implications on international trade and specialization Basic concepts – types of scale economies, monopolistic competition, product differentiation Discussion – Analysis of factors' abundance and intensity. Practical determinations and implications 5. Week V Lecture – Technology gap model and product life cycle model Basic concepts – technology gap, demand gap, international life cycle, intra-industry trade, Grubel-Lloyd index Lecture – Imperfect competition models. Implications on international trade and investments 6. Week VI Lecture – Growth and international trade Basic concepts – trade effects on production and on consumption, large economy, small economy Discussion – Modern aspects of trade flow configuration – neo-technological and nefactorial influences 7. Week VII Lecture – International migration of production factors, implications and limits; International factor migration – implications and limits Basic concepts – foreign direct investments, portfolio investments Discussion – Types of economic growth for an open economy 8. Week VIII Lecture – International trade and economic growth. Types of national economies Basic concepts – Export instability, development strategies, Krueger coefficient Discussion – New dimensions of capital migration 9. Week IX Lacture – The Payments Balance and its components Basic concepts – national account balance, capital balance, payment balance equilibrium Discussion – International trade, factors migration and growth 10. Week X Lecture – Price adjustment mechanism and its effects on the balance of payments Basic concepts – Demand elasticity – import and export, Marshall-Lerner condition, J curve Discussion – The payment balance structure – applications and cases 11. Week XI Lecture – National Income and national account. Foreign trade multiplier
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Basic concepts – import function, marginal propensity to import, general economic equilibrium, Keynes multipliers, government intervention Discussion – Implications and limits of price adjustment mechanism 12. Week XII Lecture – Economic policy objective and instruments. Mundell-Fleming model Basic concepts – extern and intern equilibrium, macro-economic policy instruments, IS/LM/BP graphs Discussion – Determining foreign trade multiplier in equilibrium for an open economy 13. Week XIII Lecture – Fiscal and monetary policy in an open economy Basic concepts – effects of fiscal and monetary policy, fix and variable exchange rates, aggregated demand Discussion – Use of economic policy instruments – case studies based on MundellFleming model 14. Week XIV Lecture – Optimal monetary zones Basic concepts – optimal adjustment of the balance of payments, bands of currency fluctuation, hybrid systems of currency fluctuation, hybrid FX rates systems Discussion – Effects of macroeconomic policies on open economies – case studies Grading: Partial examination - 15% of final grade Written essay - 15% of final grade Class contribution - 10% of final grade Final examination – 60% of final grade Textbook and course bibliography 1. Postelnicu, Cătălin, International Economics, course materials, Universitatea „Babeş-Bolyai”, Facultatea de Ştiinţe Economice, Catedra de Economie Politică, 3rd edition, 2006; 2. Postelnicu Cătălin, Rus Adina, Coordinates of International Economics, Editura Casa Cărţii de Ştiinţă, Cluj-Napoca, 2007; 3. Appleyard, Dennis R., Field, Alfred J. JR., International Economics, Third Edition, Irwin McGraw-Hill, International Edition, Boston; 4. Chacholiades, Miltiades, International Economics, McGraw-Hill International Editions, Economics Series, New York, 1990; 5. Krugman, Paul R., Obstfeld, Maurice, International Economics, Theory and Policy, Fifth Edition, Addison-Wesley Longman, Inc., Reading, 2000.
Further reading:
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1) Bran, Paul, Relaţii financiare şi monetare internaţionale, Editura Economică, Bucureşti, 1995; 2) Byé, Maurice, Relations économoques internationales, cinquiémé edition, Dalloz, Paris, 1987; 3) Caves, Richard E., Frankel, Jeffrey A., Jones, Ronald W., World Trade and Payments, An Introduction, Seventh Edition, Harper Collins College Publishers, 1996; 4) Ciobanu, Gheorghe, Postescu, Gheorghe, Sisteme de comerţ exterior, Editura Presa Universitară Clujeană, Cluj-Napoca, 2000; 5) Dunning, John H., Hamdani, Khalil A., (Editors), The New Globalism and Developing Countries, United Nations University Press, New York, 1997; 6) Husted, Steven, Melvin, Michael, International Economics, Fifth Edition, Addison-Wesley Longman, Inc., Boston, 2001; 7) Lindert, Peter H., Pugel, Thomas A., International Economics, Tenth Edition, Irwin, Chicago, 1996; 8) Marin, George, Puiu, Alexandru (coordonatori), Dicţionar de relaţii economice internaţionale, Editura Enciclopedică, Bucureşti, 1993; 9) Neme, Colette, Economie Internationale, Fondements et politiques, Deuxieme Edition, Litec Economie, Paris, 1996; 10) Postelnicu, Cătălin, Corporaţiile multinaţionale – Locul şi rolul lor în economia mondială, Ed. Casa Cărţii de Ştiinţă, Cluj-Napoca, 1998; 11) UNCTAD, World Investment Report (2000 – 2006), United Nations, NewYork, Geneva;
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Syllabus – International Economics
Year II, semester 4
Cluj – Napoca
Course identification Course name: International Economics Type: core class for International Business; elective for Accounting, Economic Informatics Prerequisites: General economic bases in Microeconomics, Macroeconomics and International Economic Transactions 2
Course objectives: Enabling students to understand and analyze the notions and processes specific to the international aspects of the economy. Course Content: Classical models of international trade and economic specialization 1. Absolute and comparative advantages 2. Standards model of international trade and economic specialization 3. The reciprocal demand curve and international trade equilibrium 4. Heckscher-Ohlin model – analysis and extensions Neo-classic and neo-technologic trade models 1. Scale economies, imperfect competition and international Technological differences model 2. Products life cycle model 3. Intra-industry trade Growth and international trade 1. Effects of growth on international trade 2. Sources of growth 3. Effects of growth in the case of a small vs. large economy Fundaments of international monetary relations 1. The Balance of Payments and its components 2. Monetary market 3. National income and national account. Trade multiplier 4. Macroeconomic policies in open economies
trade
Schedule 1. Week 1 Lecture – Absolute advantage model and comparative advantage model Basic concepts – absolute advantage, comparative advantage, interntational specialization Discussion – Characteristics of global economy 2. Week II Lecture – Standard model of international trend. Regional specialization. Trade advantages distribution Basic concepts – trade triangle, foreign exchange rate, export return rate Discussion – Practical applications and case studies on comparative advantage 3. Week III Lecture – Production factors and Heckscher-Ohlin model Basic concepts – price conversion, Stolper-Samuelson theorem, Leontief paradox Discussion – Determining international trade rates. Study and analysis of trade rate indicators 3
4. Week IV Lecture – Scale economy, imperfect competition. Implications on international trade and specialization Basic concepts – types of scale economies, monopolistic competition, product differentiation Discussion – Analysis of factors' abundance and intensity. Practical determinations and implications 5. Week V Lecture – Technology gap model and product life cycle model Basic concepts – technology gap, demand gap, international life cycle, intra-industry trade, Grubel-Lloyd index Lecture – Imperfect competition models. Implications on international trade and investments 6. Week VI Lecture – Growth and international trade Basic concepts – trade effects on production and on consumption, large economy, small economy Discussion – Modern aspects of trade flow configuration – neo-technological and nefactorial influences 7. Week VII Lecture – International migration of production factors, implications and limits; International factor migration – implications and limits Basic concepts – foreign direct investments, portfolio investments Discussion – Types of economic growth for an open economy 8. Week VIII Lecture – International trade and economic growth. Types of national economies Basic concepts – Export instability, development strategies, Krueger coefficient Discussion – New dimensions of capital migration 9. Week IX Lacture – The Payments Balance and its components Basic concepts – national account balance, capital balance, payment balance equilibrium Discussion – International trade, factors migration and growth 10. Week X Lecture – Price adjustment mechanism and its effects on the balance of payments Basic concepts – Demand elasticity – import and export, Marshall-Lerner condition, J curve Discussion – The payment balance structure – applications and cases 11. Week XI Lecture – National Income and national account. Foreign trade multiplier
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Basic concepts – import function, marginal propensity to import, general economic equilibrium, Keynes multipliers, government intervention Discussion – Implications and limits of price adjustment mechanism 12. Week XII Lecture – Economic policy objective and instruments. Mundell-Fleming model Basic concepts – extern and intern equilibrium, macro-economic policy instruments, IS/LM/BP graphs Discussion – Determining foreign trade multiplier in equilibrium for an open economy 13. Week XIII Lecture – Fiscal and monetary policy in an open economy Basic concepts – effects of fiscal and monetary policy, fix and variable exchange rates, aggregated demand Discussion – Use of economic policy instruments – case studies based on MundellFleming model 14. Week XIV Lecture – Optimal monetary zones Basic concepts – optimal adjustment of the balance of payments, bands of currency fluctuation, hybrid systems of currency fluctuation, hybrid FX rates systems Discussion – Effects of macroeconomic policies on open economies – case studies Grading: Partial examination - 15% of final grade Written essay - 15% of final grade Class contribution - 10% of final grade Final examination – 60% of final grade Textbook and course bibliography 1. Postelnicu, Cătălin, International Economics, course materials, Universitatea „Babeş-Bolyai”, Facultatea de Ştiinţe Economice, Catedra de Economie Politică, 3rd edition, 2006; 2. Postelnicu Cătălin, Rus Adina, Coordinates of International Economics, Editura Casa Cărţii de Ştiinţă, Cluj-Napoca, 2007; 3. Appleyard, Dennis R., Field, Alfred J. JR., International Economics, Third Edition, Irwin McGraw-Hill, International Edition, Boston; 4. Chacholiades, Miltiades, International Economics, McGraw-Hill International Editions, Economics Series, New York, 1990; 5. Krugman, Paul R., Obstfeld, Maurice, International Economics, Theory and Policy, Fifth Edition, Addison-Wesley Longman, Inc., Reading, 2000.
Further reading:
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1) Bran, Paul, Relaţii financiare şi monetare internaţionale, Editura Economică, Bucureşti, 1995; 2) Byé, Maurice, Relations économoques internationales, cinquiémé edition, Dalloz, Paris, 1987; 3) Caves, Richard E., Frankel, Jeffrey A., Jones, Ronald W., World Trade and Payments, An Introduction, Seventh Edition, Harper Collins College Publishers, 1996; 4) Ciobanu, Gheorghe, Postescu, Gheorghe, Sisteme de comerţ exterior, Editura Presa Universitară Clujeană, Cluj-Napoca, 2000; 5) Dunning, John H., Hamdani, Khalil A., (Editors), The New Globalism and Developing Countries, United Nations University Press, New York, 1997; 6) Husted, Steven, Melvin, Michael, International Economics, Fifth Edition, Addison-Wesley Longman, Inc., Boston, 2001; 7) Lindert, Peter H., Pugel, Thomas A., International Economics, Tenth Edition, Irwin, Chicago, 1996; 8) Marin, George, Puiu, Alexandru (coordonatori), Dicţionar de relaţii economice internaţionale, Editura Enciclopedică, Bucureşti, 1993; 9) Neme, Colette, Economie Internationale, Fondements et politiques, Deuxieme Edition, Litec Economie, Paris, 1996; 10) Postelnicu, Cătălin, Corporaţiile multinaţionale – Locul şi rolul lor în economia mondială, Ed. Casa Cărţii de Ştiinţă, Cluj-Napoca, 1998; 11) UNCTAD, World Investment Report (2000 – 2006), United Nations, NewYork, Geneva;
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