Sinhgad Institute of Business and Research

Lecture Plan 2008-09

Program – PGDFT

Course - International Economics

Name of the faculty - Shikha Jain

Learning objectives -

At the end of this course students are expected to,1. Understand the major theoretical approaches to international economics and

international relations2. Be able to apply these theoretical approaches to the analysis of the changing

situations in the world3. Appreciate the dynamics of relations between various countries and regional

organizations and their relationship with the global system

Course Resources –

Text books – I. International Economics by Dominick Salvatore

II. International Economics by Francis CherunilamRecommended readings –

International Economics by Reed and Sodersten Global Business Review, International Management Institute Foreign Trade Review, a quarterly journal of Indian Institute of Foreign Trade Focus WTO, a news and views magazine of Indian Institute of Foreign Trade Economic Times newspaper

Course assessment –

50% for continuous assessment; 50% for term-end examination. Continuous assessment will consist of the following components:1. Tutorial Presentation -20%2. Class Participation -20%3. Class assignments (2) - 60%

Lecture plan details -

Unit Topics No. of sessions

Reference chapters in the text books

Book I Book II1 Introduction to International Economics (IE) – Meaning

and scope; Three aspects of IE – Trade theory, Trade policy, and International finance

02 01 01

Presentation I – Economic shocks in open economy/ Rise in global food prices2 International Trade Theory - Mercantilism; Absolute

advantage01 02 06

2 International Trade Theory -Opportunity Cost theory; Theory of Comparative advantage

01 02 06

3 International Trade Theory - Heckscher Ohlin Theory 02 05 064 International Trade Theory - Technological gap theories;

Product life cycle theory01 07 06

4 International Trade Theory - Theories of economies of scale; Linder’s hypothesis

02 06 06

Presentation II – Global Competitiveness of Nations – concept and measurement/ Global Competitiveness of India

5 Trade policy – Free trade vs. Protection 01 08,09 095 Trade Barriers - Tariffs, quotas, and Subsidies 01 08,09 105 Partial Equilibrium 01 09 10

Presentation III – The political economy of international trade policy/ Environment regulations as trade barriers for developing economies

Review Exercise: Class assignment - I6 Terms of trade; Factors affecting terms of trade 01 04, 11 077 Foreign exchange rate – concept; Exchange rate systems –

fixed and flexible; Exchange control; Foreign exchange markets

03 14,15,20 18

10 Balance of Trade and Balance of Payments 02 13 15Presentation IV– Foreign competition and outsourcing/ Currency crises in Emerging Market Economies8 Customs Union and regional groupings and its impact on

the rest of the world; Trade creation and trade diversions 02 10 135 GATT and Uruguay round; Formation of WTO 02 09 289 Formation of European Union; Introduction of Euro;

Concept of optimum currency areas02 10 13

11 Role of International organizations – Demise of Bretton Wood; IMF - brief history, objectives, conditionality

02 21 17, 27

Presentation V– Multilateral trade negotiations/ Globalization and inequalityReview Exercise: Second class assignment

12 International capital markets; Global capital movements; Important currencies of the world

02 - 21

12 FDI and FII 01 - 2112 Role of MNCs 01 12 22

Presentation VI – Trade vs. FDI/ Survival of domestic industry in response to trade liberalizationRevision 02