Course Details

1. Critically evaluate conventional theories of international trade and foreign investment and debate free trade vs. protectionist policies.
2. Evaluate the centrifugal and centripetal forces in the world economy and assess the impact of institutional differences on international trade and international business
3. Examine how exchange rates are affected by fluctuations in economic growth, inflation, interest rates, and expectations.
4. Explain the meaning of the Balance of payments and compare and contrast the effects of fixed versus flexible exchange rates on a nation’s macroeconomic performance.
5. Understand and assess the theory of economic integration and explain origins, evolution, and treaties of the European Union.
6. Analyze institutions of the European Union and assess the competences of the European Union.
7. Debate goals, instruments and effectiveness of policies of the European Union: agricultural policy, competition policy, industrial policy, and research and technological development policy.
8. Critically evaluate advantages and disadvantages of the European monetary integration and debate the current economic problems of the eurozone.

Introduction to international trade

The main economic questions from the perspective of international trade. The basis of international trade and the evolution of trade theory: absolute vs. comparative advantages. The terms of trade. The gains from trade.

International trade policies

Trade restrictions: tariffs and non-tariff barriers to trade. Free trade vs. protectionism. Strategic trade policies. The New protectionism: theories and evidence. International trade and economic development.

International factor movements

Theories of international factor movements: motives and welfare effects. The impact of institutional differences on international trade and investment. Types of international investments and their determinants. M. Porter’s theory of competitive advantages of nations. J. Dunning’s contribution to the theory of international investment and multinational corporations.

The Balance of Payments

The Foreign exchange market and the Balance of Payments. Factors determining fluctuations in the foreign exchange market. The balance of payments. Accounting balances and disequilibrium in international transactions. Fixed vs. floating exchange rate systems. The international monetary system.

Theory and practice of international economic integration

The theory of economic integration. Stages of economic integration. Origins, evolution, and treaties of the European communities and the establishment of the European Union. The Lisbon treaty and the future of the EU.

Institutions of the European Union

Competencies of the EU and its institutions. The European Parliament. The Council of the EU. The Presidency of the EU. The European Commission. The Court of auditors and the Court of Justice.

Policies of the European Union

Goals, instruments and subjects of the policies of the EU. The common agricultural policy – achievements and controversies. The competition policy and its potential. Advantages and shortcomings of the industrial policy. Research and technological development policy. Effectiveness of policies of the EU: theory vs. reality.

The European monetary integration

Theory of monetary integration. The economic and monetary union.  The convergence criteria and the Eurozone. Competencies of the European Central bank. Analysis of the merits and drawbacks of the European Monetary Union. The problem with budget deficits and stability in the Eurozone.

• Oatley T. International Political Economy (2010) Longman

• Salvatore D. International Economics, Prentice Hall, the latest edition.
• El-Agraa A. M. The European Economic Union: economics and policies (2007) , Cambridge University press
• Balaam D. and Veseth M. Introduction to International Political Economy (2007). Prentice Hall
• Krugman P. and M. Obstfeld (2009). International Economics: Theory and Policy. Prentice Hall.
• Greber J. International Economics (2011) , Fifth edition, Prentice Hall
• Neal L. (2007), The economics of Europe and European union. Larry Neal. Cambridge University press.
• De Grauwe P. Economics of Monetary Union. (2008), Oxford University press.
• Baldwin R. The Economics of European Integration (2009). McGraw Hill Higher Education.

Ex cathedra lectures and discussions in class, by means of traditional tools or using computer demonstrations. Some of the key issues are revealed on the basis of simulation games.

Topic notes are compiled by students, during the lecture which serve to cover the main issues under consideration and can also be downloaded from the lecturer’s webpage. Further literature search is encouraged by assigning students to identify a specific problem related to some issue, gather relevant scientific information about how others have addressed the problem and report this information in written or orally.

Students’ teams (of two or three individuals) are assigned to study a current economic problem, related to the international trade and investment, international monetary system, and international economic integration. The case study should be presented in class.