INTERNATIONAL ECONOMICS - I

Analytical Tools – production possibility curve, community indifference curve, price line, offer curves; Mercantilism; Theory of Absolute Advantage; Theory of Comparative Advantage and its empirical tests; Opportunity Costs Theory (in terms of constant costs and increasing costs).

Offer Curves – Mill’s doctrine, Equilibrium relative commodity price with trade; Terms of trade – meaning and different concepts;

Factor Endowment Theory – H O Theorem, Factor Price Equalization Theorem; Empirical tests of HO model – Leontief’s Paradox; Factor intensity reversal.

The Imitation Lag Hypothesis; The Product Cycle Theory; The Lindar Cycle; The Krugman Model; The Reciprocal Dumping Model; The Gravity Model; Intra Industry Trade – Reasons.

Trade based on dynamic technological differences; Growth of factors of production –The Rybczynski Theorem; Technical progress; Growth and Trade – the small country case; Growth and Trade – the large country case – Immeserizing Growth; Growth, Change in tastes and trade in both nations.

International capital movements-Reasons, FDI and FII; Analytical effects of international capital movements; Potential benefits and costs of FDI to a host country; Labour movements between countries and its economic effects.