Programme And Module Handbook
Course Details in 2024/25 Session

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Module Title LH International Trade Theory and Policy
SchoolBirmingham Business School
Department Economics
Module Code 08 31984
Module Lead TBC
Level Honours Level
Credits 20
Semester Semester 1
Restrictions None
Description The module will provide a rigorous analysis of the theoretical concepts that the students have encountered in LI Microeconomics, used for developing trade theory. The module introduces the core of international trade theory and uses these models as the basis for further policy analysis.

The prevailing challenge is to explain the determinants of national comparative advantage, by considering the major traditional theories, including relative differences in labour productivity, factor endowments, production functions and factor specificity followed by more recent explanations of trade patterns such as differences in market structures, the effects of imperfect competition, and scales in production, as well as the theory of trade policy. Relevant empirical evidence relating to these theories and to what degree it provides support for them, will also be investigated.

Following from the theory-based analysis, the module is devoted to the analysis of government trade policies. Topics covered include strategic trade policy (which analyses trade policy under imperfect competition) and political economy (which analyses how trade policy is determined under both median voter and lobbying models). This is followed by examining global and regional moves towards free trade and how these interact with each other. Finally the module considers the motivation for foreign direct investment (FDI), how trade affects growth, and controversies in trade policy. While the focus is mainly on understanding the theory underlying policy choices, examples are used to illustrate the ideas.
Learning Outcomes By the end of the module students should be able to:
  • demonstrate a critical understanding of central international trade theories explaining the patterns of trade and the empirical evidence relating to these theories;
  • apply partial and general equilibrium models to analyse international trade and evaluate the effects of trade and trade-related policies on welfare;
  • critically analyse how economic theory is used to formulate trade policy;
  • demonstrate an advanced, systematic knowledge and understanding of alternative reasons for using trade policy and the institutions governing trade.
Assessment 31984-01 : Individual Assignment : Coursework (50%)
31984-02 : Examination : Exam (Centrally Timetabled) - Written Unseen (50%)
Assessment Methods & Exceptions Assignment (50%) and 2-hour final exam (50%)
Reading List