To develop an understanding of various issues related to international economics
12.00
Unit I:
International Trade Policy – I
Free Trade vs Protectionism;
Tariffs – meaning and types;
Partial Equilibrium Analysis of a Tariff;
Rate of Effective Protection;
General Equilibrium effects of tariffs in a small nation – The Stolper Samuelson Theorem;
General Equilibrium effects of tariffs in a large nation – The Optimum Tariff.
12.00
Unit II:
International Trade Policy – II
Import Quotas – Meaning, types and effects;
Import Tariff vs Import Quota;
Other non tariff barriers – Voluntary Export Restraints; Technical, Administrative and Other Regulations; International Cartels; Dumping; Export Subsidies;
Strategic Trade and Industrial Policies.
12.00
Unit III:
Economic Integration
Forms of economic integration;
Trade creating customs union;
Trade diverting customs union;
Static and Dynamic effects of customs union;
European Union, NAFTA, EFTA.
12.00
Unit IV:
Balance of Payments & Devaluation
Components of balance of payments;
Balance of payments disequilibrium – meaning and causes;
Measures to correct disequilibrium in the balance of payments;
Foreign Trade Multiplier;
Effects of fiscal & monetary policies on external balance;
Devaluation – elasticities approach, Marshall-Lerner condition, income absorption approach;