1. Prof. Dr. Dr. h. c. Karl-Heinz Paqué
Chair of International Economics
International Trade
0. Table of Content

2. Lecture: INTERNATIONAL TRADE Time: Friday, 7-11 h
Lecture:
INTERNATIONAL TRADE
Time: Friday, 7-11 h
Place: G22A-H2 ! Starting November 10th, place: G22A-020!
Canceled:
Important:
For canceled lectures and additional lectures
please check homepage!

3. OVERVIEW:
1 What Is International Trade About?
2 World Trade: Some Observations
3 Trade Theory I: Labour Productivity and Comparative Advantage: The Ricardian Model
4 Trade Theory II: Resources and Trade: The Heckscher-Ohlin Model
5 Trade Theory III: Selected Topics in a Standard Trade Model
6 Trade Theory IV: Imperfect Markets and Trade
7 Theory of International Factor Movements: Migration and Capital Flows
8 Trade Policy I: The Instruments
9 Trade Policy II: The Political Economy
10 Trade Policy III: Growth and Development
11 Trade Policy IV: Past and Current Issues
12 The Future: Theory and Policy

4. Literature:
The lecture largely follows the structure and contents of the textbook by Paul R. Krugman, Maurice Obstfeld, Marc J. Melitz, International Economics – Theory and Policy, 10th Edition Older editions of the book can be used except if otherwise noted in the course of the lecture.

5. CONTENTS IN DETAIL:
1 What Is International Trade About?
2 World Trade: Some Observations
3 Trade Theory I: Labour Productivity and Comparative Advantage: The Ricardian Model
3.1 The Model
3.2 Gains From Trade
3.3 Comparative Advantage
3.4 Extended Model Versions
3.5 Transport Costs and Non-Tradable Goods
3.6 Empirical Evidence

6. 4 Trade Theory II: Resources and Trade: The Heckscher-Ohlin Model
4.1 The Model
4.2 The Effects of Trade
4.2.1 Relative Prices and the Pattern of Trade
4.2.2 Trade and the Distribution of Income
4.2.3 Factor Price Equalisation
4.3 Gains from Trade
4.4 Empirical Evidence
5 Trade Theory III: Selected Topics in a Standard Trade Model
5.1 The Model
5.2 Terms of Trade Changes
5.3 Biased Growth
5.4 International Transfers of Income
5.5 Import Tariffs and Export Subsidies
5.6 Another Device: Offer Curves

7. 6 Trade Theory IV: Imperfect Markets and Trade
6.1 The Theory of Imperfect Competition
6.1.1 Monopolistic Competition
6.1.2 The Effect of Market Size
6.2 Heterogeneous Firms
6.3 Trade Costs
6.4 Dumping
6.5 External Economies of Scale
6.6 Economic Geography
7 Theory of International Factor Movements: Migration and Capital Flows
7.1 Labour Mobility
7.2 Borrowing and Lending
7.2.1 Intertemporal Trade
7.2.2 Comparative Advantage
7.3 Direct Foreign Investment

8. 8 Trade Policy I: The Instruments
8.1 Partial Equilibrium Analysis of a Tariff
8.2 Costs and Benefits of a Tariff
8.3 Other Instruments of Trade Policy
8.4 General Equilibrium Analysis of a Tariff
8.5 Trade Policy in the Presence of Monopoly
8.6 The Effective Rate of Protection

9. 9 Trade Policy II: The Political Economy
9.1 The Case for Free Trade
9.2 National Welfare Arguments Against Free Trade
9.3 Income Distribution and Trade Policy
9.4 Trade Negotiations and Agreements
9.4.1 Some Theory and History
9.4.2 General Agreement on Tariffs and Trade (GATT)
9.4.3 World Trade Organisation (WTO)
9.5 Preferential Trade Agreements
9.5.1 Trade Diversion and Trade Creation
9.5.2 EU and EFTA
9.5.3 NAFTA and others

10. 10 Trade Policy III: Growth and Development
10.1 A Policy of Import Substitution
Infant Industry Argument
Protection of Manufacturing
The Switch to Liberalisation
10.2 A Policy of World Market Orientation
Idea and Concept
Reality: East Asian Growth
Trade and Industrial Policy

11. 11 Trade Policy IV: Past and Current Issues
11.1 Strategic Trade Policy
The Idea
Case Studies
11.2 The Effects of Globalisation
Trade and Wages
Social Standards
Environmental Standards
11.3 Transatlantic Trade and Investment Partnership (TTIP)
12 The Future: Theory and Policy