AØKA08021U  International Economics

Volume 2013/2014
BSc in Economics
MSc in Economics
The course studies causes and consequences of international trade. We seek to answer questions such as: Why do countries trade? What do they trade? Who gains and who loses from trade? What is the impact of trade policy on welfare? The course also considers aspects of the globalisation debate: Is wage inequality affected? What are the implications of multinationals and outsourcing? Within the topic of international monetary economics the course covers theories of optimum currency areas.
Learning Outcome

The purpose of the course is to give an introduction to traditional and new trade theories and selected topics in international monetary economics. The aim is that the students, after participating in the course International Economics, will be able to:

  • understand and describe why international trade arise
  • understand and describe trade patterns under perfect and imperfect competition
  • understand and describe the extent to which there are welfare gains from trade
  • analyse and calculate how trade affects behaviour of firms and consumers and how trade affects welfare
  • analyse and calculate how trade policy affects firm behaviour and analyse and calculate welfare implications of trade policy
  • understand and describe aspects of the globalisation debate such as the impact of globalisation on wage inequality, the role of multinational corporations, and labour market consequences of outsourcing
  • understand and describe the theory of optimum currency areas
  • describe and analyse in a clear and correct written language

Students who achieve all these goals will be given the top grade.

Barba Navaretti, G. and A. Venables (2004), Multinational Firms in the World Economy, Princeton University Press, p. 1-22, 49-64.
Brander, J. and P. Krugman (1983), A 'Reciprocal Dumping' Model of International Trade, Journal of International Economics, 15, p. 313-321.
Brander, J. and B. Spencer (1985), Export Subsidies and International Market Share Rivalry, Journal of International Economics, 16, p. 83-100.
Feenstra, R. and G. Hanson (2003), Global Production Sharing and Rising Inequality: A Survey of Trade and Wages, in E. K. Choi and J. Harrigan (eds.), Handbook of International Trade, Blackwell Publishing, p. 146-167.
Krugman, P. (1979), Increasing Returns, Monopolistic Competition, and International Trade, Journal of International Economics, 9, p. 467-476.
Krugman, P., M. Obstfeld and M. Melitz (2012), International Economics, Theory and Policy, 9th edition, Addison-Wesley. Chapter 1-12, 20. Appendices to chapters are also required readings.
Rose, A. (2000), One Money, One Market: The Effect of Common Currencies on Trade, Economic Policy 30, p. 8-45.
Lecture notes uploaded at the course home page are also required readings.
Basic micro- and macro theory of the first two years. Knowledge of basic Ordinary Least Squares (OLS) regression and either SAS or Stata software packages is also required.
3 hours of lectures per week for 14 weeks
7,5 ECTS
Type of assessment
Written examination, 3 hours under invigilation
A 3 hours written examination taking place at Peter Bangs Vej 36.
Exam registration requirements
Students have to write a short term paper to sign up for the exam.
Without aids
Marking scale
7-point grading scale
Censorship form
External censorship
100 % censurship
Exam period
Will be updated before the start of the semester
Same as ordinary. But if only a few students have registered for the re-exam, the exam might change to an oral exams with a synopsis to be handed in. This means that the examination date also will change.
Criteria for exam assesment
The Student must in a satisfactory way demonstrate that he/she has mastered the learning outcome of the course.
  • Category
  • Hours
  • Lectures
  • 42
  • Preparation
  • 161
  • Exam
  • 3
  • Total
  • 206