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Unit I Introduction

International economics describes production, trade, and investment between countries. It studies the economic interactions and transactions between nations as well as related policies and institutions. The scope of international economics includes trade, globalization, comparative economic policy, international organizations, monetary dynamics in open economies, migration, and international investment. The study of international economics has three aspects: trade theory, trade policy, and international finance/open economy macroeconomics.

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98 views13 pages

Unit I Introduction

International economics describes production, trade, and investment between countries. It studies the economic interactions and transactions between nations as well as related policies and institutions. The scope of international economics includes trade, globalization, comparative economic policy, international organizations, monetary dynamics in open economies, migration, and international investment. The study of international economics has three aspects: trade theory, trade policy, and international finance/open economy macroeconomics.

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deepakarora201188
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© Attribution Non-Commercial (BY-NC)
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Unit I - An introduction to

International Economics
(IE)

Day and Date: Thursday, July 24,’08


Unit Highlights…

• Meaning
• Significance
• Scope
• Composition of IE –
Trade theory
Trade policy and
International finance/Open economy
macroeconomics
Text book reference chapters…

 International Economics by Dominick


Salvatore – Chapter 1

 International Economics by Francis


Cherunilam – Chapter 1
What is IE?

International economics describes and


predicts PRODUCTION, TRADE, and
INVESTMENT across countries.
What is IE?

The study of ECONOMIC INTERACTIONS


among countries -- including trade,
investment, financial transactions, and
movement of people -- and the POLICIES
and INSTITUTIONS that influence them.
Why study IE?

 Trends towards ever-increasing openness-


Liberalization and Globalization
 Rapid integration of international economic
markets – new opportunities, new challenges
 Revolution in ICT
Scope of IE
• Trade
• Globalization and regional integration
• Comparative economic policy
• International political economy –international
organizations and policy cooperation
• Monetary and real/technological dynamics in
open economies
• Migration
• International investment
• Internet commerce and regulation
Composition of the study of IE

Three aspects of IE –
1. Trade theory
2. Trade policy and
3. International finance/Open economy
macroeconomics
1. Trade theory

International trade theory helps us assimilate,

• Why nations trade?


• What are gains from trade?
• What is the pattern of trade?
2. Trade policy

Restrictions and regulations that nations


impose on the free movement of
commodities, capital, investment, and
people across borders.
3.International finance/Open economy
macroeconomics

Cross-border capital flows


To conclude…

Hallmarks of today’s world economy,


 Liberalization
 Integration
 Innovation
You should now know…
 What is IE?
 Why study IE?
 What is the scope of IE?
 What is the composition of IE as an
academic discipline?

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