EC3016 International economics
EC2065 Macroeconomics andeither MN3028 Managerial economics or EC2066 Microeconomics.
The course is conventionally divided in two parts: international trade and international monetary economics. This virtually coincides with the distinction between the microeconomics and the macroeconomics of the open economy.
International trade: Reasons for trade and explanation of trade patterns; the gains accruing from trade or from restricting trade. These are core areas and call for extensive coverage. Adjacent to this core are a number of specific issues which must also be studied: increasing returns and trade; international factor movements; growth and trade; income distribution and trade; economic integration; multinational enterprises; 'North-South' issues. Empirical evidence supplements the theoretical treatment.
The EU, WTO and UNCTAD are institutionally involved in trade policy issues and their major concerns are included in the subjects to be studied.
International monetary economics: The balance of payments; exchange rates. (Subheadings under the former include: balance of payments accounts; alternative concepts of surplus or deficit; identities which link a surplus/deficit with national income/expenditure aggregates and with money stock; financing of deficit. Subheadings under exchange rates include: spot and forward markets; pegged, floating and discretionary intervention regimes; trade weighted and 'real' exchange rates; exchange rate stability: the Marshall-Lerner condition; exchange rate stability: the role of speculators; purchasing power parity hypothesis). Simple open economy models and their principal features; policy targets and instruments; issues of macroeconomic management; independence and interdependence of open economies; effects of exogenous events such as unilateral transfers. North Sea oil etc. Empirical evidence, though often inadequate and conflicting, is relevant in many areas.
Issues associated with the EMS, the IMF and, in general, with international monetary relations are also included in the syllabus.