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. The course relies predominantly on a standard collection international trade models to understand the motivations behind modern trade policies. During the weekly seminar, students then analyse the efficacy of trade policy, considering both intended and unintended consequences of policy choices with particular attention paid to the changing geopolitical environment in which these policies exist.
Course learning outcomes
- 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 models
- Apply 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