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2010/1 Module Catalogue
Module Provider: Economics Short Name: ECO3037
Level: HE3 Module Co-ordinator: NEWMAN ME Mrs (Economics)
Number of credits: 30 Number of ECTS credits: 15
Module Availability
All year
Assessment Pattern
Unit(s) of Assessment

Weighting Towards Module Mark (%)

3 Hour Examination




Qualifying Condition(s)
A weighted aggregated mark of 40% is required to pass the module.
Module Overview

The module broadly covers four parts.

In the first part we examine the foreign exchange market; we study the balance of payments and discuss purchasing power parity and the determinants of the exchange rate in the short-run and in the long-run, among other issues.

In the second part, we discuss the macroeconomic implications of certain policies in an open economic environment (e.g. examine the choice of exchange rate regimes and the mix of fiscal and monetary policies that are consistent with certain policy targets).

In the third part, we concentrate on the theoretical foundations of international trade, i.e. address the questions “why do we trade” and “is trade good for us?”.

Finally, we focus on the policy instruments that are available to the designers of trade policy; our analysis involves issues related to the potential costs and/or benefits to a range of stakeholders of trade barriers, e.g. tariffs and quotas.

Module Aims
The aim of this course is to introduce the workings of an open economy.
Learning Outcomes
By the end of the module students will:
  • Have an understanding of the theory of international trade
  • Be able to discuss trade policy issues
  • Demonstrate a sound grasp of the workings of the foreign exchange (FX) markets
  • Be able to analyse the effectiveness of macroeconomic policies for open economies.
Module Content
  • International factor movements, balance of payments, foreign exchange market, purchasing power parity (PPP), covered interest parity (CIP), uncovered interest parity (UIP), exchange rates in the long run, exchange rate regimes, currency crises, macro policies for open economies; Adam Smith's theory of absolute advantage, Ricardo's theory of comparative advantage, Heckscher-Ohlin theory, economies of scale, monopolistic competition and trade, oligopoly and trade, tariffs, import quotas, voluntary export restraints, WTO, dumping, trade blocks, trade and the environment, policies for developing countries.
  • Methods of Teaching/Learning
    Weekly two-hour lectures.
    Selected Texts/Journals

    The course will closely follow Thomas A. Pugel's 13th edition of International Economics (2007), McGraw Hill, ISBN-10: 0071107274.

    Krugman and Obstfeld's International Economics: Theory and Policy (2006, Edison Wesley, ISBN-10: 0321461835) can be used for supplementary reading.

    A slightly more advanced textbook with a European focus is international Economics Theory, application, and policy by Charles van Marrewijk (2006, Oxford University Press, ISBN-10: 0199280983).     
    Last Updated

    5 October 2010