Course overview
This course deals with the theory and practice of international trade and of trade-related policies. It focuses on analysing the gains from trade, the changing patterns of trade, the income distributional consequences of liberalising foreign trade, the relationship between trade, investment, and economic growth, and the reasons for and consequences of trade policies.
Course learning outcomes
- The purpose of this course is to provide students with a thorough grounding in the theory of international trade as well as international trade policy and to demonstrate the relevance of the theory in the analysis of (a) existing patterns of international trade and what determines them, (b) the conduct of trade policy and (c) the economic implications of international trade and trade policy both for individual economies such as Australia and the wider international community
- Compare at the level of formal analysis the major models of international trade and be able to distinguish between them in terms of their assumptions and economic implications
- Employ the principle of comparative advantage and its formal expression and interpretation within different theoretical modelsApply partial equilibrium and (where required) general equilibrium models in analysing the economic effects of (a) trade policy instruments such as tariffs, quotas, export subsidies, (b) retaliatory measures such as anti-dumping duties and countervailing duties and (c) the creation of regional trading arrangements such as free trade areas, customs unions and common markets
- Distinguish and critically analyse the main arguments for protection and conversely be able to critically evaluate the relevance and realism of arguments for free trade, taking into account the costs and benefits of trade policy measures on different sections of the community and the implications for the formulation of trade policy
- Identify major recent developments in the world trading system and be able to critically analyse key issues raised both by the current round of WTO negotiations and by the spread of regional trading arrangements
- Form the relationship between international trade theory and the observed practice of trade through evidence based analysis
- Understand how the relationship among trade policy, trade practice and geopolitics can lead to sub-optimal welfare and growth outcomes