Unit 2507: International Economics

1. Introduction to International Economics

• Definition and scope of international economics
• Principles of globalization
  • Economic integration
  • Cross-border flows of goods, services, capital, and labor
• Basics of international trade
  • Imports and exports
  • Benefits of trade
• Exchange rates overview
  • Definition and importance
  • Factors affecting exchange rates

2. The Theory of Comparative Advantage

• Classical trade theories overview
• Comparative advantage explained
  • Absolute vs. comparative advantage
  • Opportunity cost concept
• How comparative advantage shapes trade patterns
• Specialization and gains from trade
• Limitations and assumptions of the theory

3. Trade Policies and Agreements

• Trade policy instruments
  • Tariffs: types and effects
  • Quotas: quantitative restrictions
  • Subsidies: purpose and impact
• Protectionism vs free trade debate
• Major international trade agreements
  • NAFTA / USMCA
  • World Trade Organization (WTO)
  • Regional trade agreements
• Effects of trade policies and agreements on economies

4. Balance of Payments

• Definition and importance
• Components of the balance of payments
  • Current account
    • Trade in goods and services
    • Income and transfers
  • Capital account
  • Financial account
• Understanding surpluses and deficits
• Relationship between balance of payments and exchange rates

5. Exchange Rates and Foreign Exchange Markets

• Exchange rate systems
  • Fixed, floating, and pegged rates
• Currency valuation methods
• Foreign exchange market operations
  • Spot and forward markets
  • Currency speculation and arbitrage
• Factors influencing exchange rates
  • Interest rates
  • Inflation
  • Political stability

6. International Monetary System

• Historical systems overview
  • Gold standard
  • Bretton Woods system
• Fixed vs floating exchange rate regimes
• Role of International Monetary Fund (IMF)
• Current international monetary arrangements

7. Globalization and Its Impacts

• Definition and drivers of globalization
• Economic growth and globalization
• Effects on income distribution and inequality
• Employment trends and labor markets
• Environmental impacts and sustainability concerns
• Case studies of globalization effects in different countries

8. Economic Development and International Trade

• Relationship between trade and development
• Trade as a tool for poverty reduction
• Challenges faced by developing countries in trade
• Role of export-led growth strategies
• Trade barriers and development

9. Multinational Corporations and Foreign Direct Investment

• Definition and characteristics of multinational corporations (MNCs)
• Role of FDI in global trade and development
• Benefits and drawbacks of MNCs for host countries
• Impact on national sovereignty and policy
• Case examples of MNCs

10. Economic Crises and International Economics

• Types of economic crises
  • Currency crises
  • Financial crises
  • Sovereign debt crises
• Causes of international economic crises
• Consequences on global trade and investment
• Policy responses and crisis management
• Recent examples and lessons learned