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 relations
2. Be able to apply these theoretical approaches to the analysis of the changing
situations in the world
3. 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 Cherunilam
Recommended 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 -

Reference chapters in
Unit Topics No. of the text books
sessions Book I Book II
1 Introduction to International Economics (IE) – Meaning
and scope; Three aspects of IE – Trade theory, Trade 02 01 01
policy, and International finance
Presentation I – Economic shocks in open economy/ Rise in global food prices
2 International Trade Theory - Mercantilism; Absolute 01 02 06
advantage
2 International Trade Theory -Opportunity Cost theory; 01 02 06
Theory of Comparative advantage
3 International Trade Theory - Heckscher Ohlin Theory 02 05 06
4 International Trade Theory - Technological gap theories; 01 07 06
Product life cycle theory
4 International Trade Theory - Theories of economies of 02 06 06
scale; Linder’s hypothesis
Presentation II – Global Competitiveness of Nations – concept and measurement/ Global Competitiveness
of India
5 Trade policy – Free trade vs. Protection 01 08,09 09
5 Trade Barriers - Tariffs, quotas, and Subsidies 01 08,09 10
5 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 - I
6 Terms of trade; Factors affecting terms of trade 01 04, 11 07
7 Foreign exchange rate – concept; Exchange rate systems – 03 14,15,20 18
fixed and flexible; Exchange control; Foreign exchange
markets
10 Balance of Trade and Balance of Payments 02 13 15
Presentation IV– Foreign competition and outsourcing/ Currency crises in Emerging Market Economies
8 Customs Union and regional groupings and its impact on
the rest of the world; Trade creation and trade diversions 02 10 13
5 GATT and Uruguay round; Formation of WTO 02 09 28
9 Formation of European Union; Introduction of Euro; 02 10 13
Concept of optimum currency areas
11 Role of International organizations – Demise of Bretton 02 21 17, 27
Wood; IMF - brief history, objectives, conditionality
Presentation V– Multilateral trade negotiations/ Globalization and inequality
Review Exercise: Second class assignment
12 International capital markets; Global capital movements; 02 - 21
Important currencies of the world
12 FDI and FII 01 - 21
12 Role of MNCs 01 12 22
Presentation VI – Trade vs. FDI/ Survival of domestic industry in response to trade liberalization
Revision 02