International Economics (4 credit hours) Dr. Agim Kukeli
Administrative Building, II-nd Floor 355 4 2441 330

355 4 2441 329
By appointment only.
10:00 – 14:00 Wednesday 5-A

The course will highlight sources of comparative advantage, gains and losses from trade, the impact of trade on economic growth, and effects of trade policy interventions such as tariffs, quotas, voluntary export restraints, and export subsidies. International agreements on regional trade liberalization (such asEUandNAFTA)andmultilateraltradeliberalization(e.g.WTO)willalsobediscussed. Thecourse will also include topics on international finance such as balance of payments, determination of foreign exchange rates, and international monetary system.


This course requires a good intermediate knowledge of macro and micro economics. Students should be familiar with mathematical tools and be able to interpret and derive conclusions of econometrics and/or statistics exercises.

Course Purpose:

The purpose of this course is to help students understand the basics of international trade and finance and the effects of various international economic policies on domestic and world welfare. In this respect, we will discuss the reasons why nations trade in commodities and finance each others consumption and investments; who gains from these activities; what are and the effects of this trade on economic growth, macroeconomic variables and its other economic and social implications. We will also discuss the rules and regulations imposed by governments on trade, the motivation and the effects of such policies.

Course Objectives:

Upon completion of the course, students should be able to:
1. develop critical thinking regarding issues of international economics
2. use the concepts of international economics both trade and monetary to understand and analyze

current economic issues from the open economy point of view

3. be able to develop a set of analytical tools that can be successfully applied on their everyday work and the study of other fields of economics

Required Reading: International Economics Theory and Policy, 9th edition, Paul Krugman, Maurice Obsfeld, and Marc Melitz, Pearson 2012.

Additional reading material will be provided in class or by e-mail to augment the textbook. You will be responsible for finding, printing, reading, etc of the materials send by e-mail, unless otherwise specified. Use your e-mail account as an important source of information, for class materials and additional information regarding this course.

Required Readings should be completed prior to each class, therefore lecture assumes that you have read the material. Please come to class with questions on these readings. This will make class more enjoyable and productive.

Other sources of information:

1. Journal Articles

2. News Articles
GREG MANKIW’S BLOG “RandomobservationsforstudentsofEconomics”at:

BusinessWeek Magazine at:
Yahoo Economic News at:
Bloomberg News at: Financial Time at:

Course Policies:

This course will respect the code of conduct and all related UNYT policies with regard to: lecture attendance, plagiarism etc. All cellular phones must be switched off during class period.


Two examinations will be given. One midterm exam will be given during the 7-th week of classes, and a final exam covering all course content will be given during the final examination period. Test format may combine a mixture of short answer, true/false, matching, sort answer, and one or two essay questions covering all readings, lecture, hand-out and class discussion content. Make up exams will be allowed only for compelling reasons upon provision of verification and will require pre-approval.


Participation extends beyond mere attendance. Expect your instructor to keep track of how often you contribute to class discussion (as a whole), particularly during the panel discussion section. You may miss up to three classes without penalty – your first two absences count whether you have a good excuse or not. Each absence beyond the first three will cost you points off of your participation grade. The only exceptions to this rule are severe illness (doctor’s note required) and UNYT approved

trips/activities. Appropriate documentation for absences beyond the first three is necessary the class day directly before or after the one you miss. In general: this class is intensive and interactive. Missing class could seriously affect your grade! Students are reminded not to approach the instructor for copies of the previous week’s materials during immediately before, during, or immediately after class. Students are expected to collect materials from their classmates or see the instructor during consultation hours.

Assignments will consist of:
Problem sets or short reaction papers depending on the topic. They are important tools to practice and better prepare for exams (worth 10% of your grade). Answers to the homework will be discussed in class shortly after they are due. Therefore, no late homework will be accepted. The assignments will be due at the beginning of the class at the due date.

Course Grade: Grade Component Participation

Midterm Final Assignments

Grading Scale:
Grading scale follows the official UNYT as below

Contribution to Final Grade 10%

40 % 40 % 10 %

Letter Grade

Percent of Total Grade

Generally Accepted Meaning



Outstanding work





Good work, distinctly above















Significantly below average







Work that does not meet the minimum standards for passing the course

Tentative Course Outline:

While the course will try to explore all topics several important issues will receive particular attention. Core chapters that cover critical models and theory are market in bold. The instructor holds the right to make changes to the syllabus, and will inform the students in due course.

Weeks 2 – 3 weeks


1 – 2 weeks

3 – 4 weeks

1 – 2 weeks

Topics and Chapters

Chapter 1: Introduction
Chapter 2: World Trade: An Overview

Chapter 3: Labor Productivity and Comparative Advantage: The Ricardian Model

Chapter 4: Resources, Comparative Advantage, and Income Distribution

Chapter 5: The Standard Trade Model

Chapter 6: Economies of Scale, Imperfect Competition, and International Trade

Chapter 7: International Factor Movements

Chapter 8: The Instruments of Trade Policy Chapter 9: The Political Economy of Trade Policy Chapter 10: Trade Policy in Developing Countries Chapter 11: Controversies in Trade Policy

Chapter 12: National Income Accounting and the Balance of Payments

Chapter 13: Exchange Rates and the Foreign Exchange Market: An Asset Approach

Chapter 14: Money, Interest Rates and Exchange Rates

Chapter 15: Price Levels and the Exchange Rate in the Long Run

Chapter 16: Output and the Exchange Rate in the Short Run

Chapter 17: Fixed Exchange Rates and Foreign Exchange Rates

Chapter 18: The International Monetary System

Chapter 19: Macroeconomic Policy and Coordination under Floating Exchange Rates

Chapter 20: Optimum Currency Areas and the European Experience

Chapter 21: The Global Capital Market: Performance and Policy Problems & Chapter 22: Developing Countries: Growth, Crisis, and Reform

Faculty: Economics.

Department: Business.

Scheduele: 10:00 – 14:00 Wednesday 5-A

Instructor: Dr. Agim Kukeli