The first part focuses on models of international trade theory, dealing with the causes and consequences of trade and trade policy under perfect and imperfect competition. The second part introduces students to a variety of topics in international finance/ open economy macroeconomics.

After this class students should have a sound knowledge of the main theories of international trade and international finance, understand their empirical implications, and be able to apply them to real world issues and questions of economic policy relevance. The course consists of a international trade part and an international macroeconomics/finance part. In the former part the course focuses on models of international trade theory, dealing with the causes and consequences of trade and trade policy under perfect and imperfect competition. Selected topics in the international finance part include: business-cycle facts around the world; small open economy models (endowment and production economies) with a focus on the current account; two-country extensions, importable Goods, exportable Goods and the terms of trade; nontradable goods and the real exchange rate; open economy monetary models and exchange rates; exchange rate policy and capital controls; (if time permits open economy applications with financial frictions and aggregate instability; models of sovereign default)

Lectures, Exercises, Tests, Student Presentations

Final Exam in the part on international trade (60 minutes; 35%), Final Exam in the part on international macro/finance (60 minutes; 35%), one presentation (10%) and two home assignments (each 10%). A positive result on the joint final exams in the trade and macro/finance part  (50% threshold of total points) and a positive presentation are required for passing the class. There will be one retake exam at the end of term covering all units for those who failed.

Presentations: in the international trade part: at the end of the units 2-5 and 7-9: students present articles from magazines (e.g., The Economist) of their choice (related to international economics), 5-10 min. For each presentation there will be assigned discussants and an open discussion. In the international macro/finance part: presentation of a current paper in the unit 7. Group sizes depend on class size.

Home assignments: in groups of 2 (to 3) students.

During the registration period, students will be placed on a first-come, first-serve basis. Once registration closes, more seats will be made available. Students from the waiting list will then be placed based on their cohort. Students from an older cohort will be placed before students from younger cohorts. If you are registered, but do not intend to take the class, we ask you to deregister during the registration period. There is no guarantee for a seat in this lecture!

Please show up in the first lecture to secure your place. (If you are not able to attend the first lecture, please notify us before hand.) Vacant spots might be offered to students on the waiting list (attending the first lecture).

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Good knowledge of microeconomics, macroeconomics, mathematics; knowledge in econometrics is helpful.

Tipp: As introductory easy reading, we recommend Feenstra and Taylor (2017): International Economics, New York: Worth Publishers.

harald.badinger@wu.ac.at; katrin.rabitsch@wu.ac.at

(Integrated) schedule for lecture course and R&P seminar. Schedule will be available in due course.