This course discusses the central causes of trade relations between countries and their effects on prosperity and income distribution. The classical foreign trade model of Ricardo, the Heckscher-Ohlin model and the so-called “new foreign trade theory” (Krugman, Melitz, etc.) are used as analytical tools. Building on this, various trade policy measures are analyzed theoretically and by using examples. This includes an overview of the functioning of international trade agreements (GATT, WTO) as well as the public debates about them. 

After completing this course, students should be able to explain:

• Why countries engage in trade and, specifically, how trade between industrialized countries differs from trade between industrialized and developing countries;
• The impact of market globalization on income inequality, both in terms of inequality between countries and inequality among different actors within a country;
• The effects of trade policy restrictions on the overall welfare of a society;
• Why trade agreements are formed, identifying points of conflict regarding their creation and impacts.

During the lecture part, the course instructor will deliver the content relevant for the exam. The main reference is the textbook Feenstra/Taylor: International Economics, along with accompanying lecture slides. To monitor individual learning progress, online quizzes will take place in the beginning of the next unit after a chapter is finished. (Participation is only possible if present in class)

The final grade is based on 4 online quizzes and 3 assignments (both 40%), participation in class (20%) and a final exam (40%).

The 3 best results out of the 4 quizzes will count towards the grade. They are held at the beginning of a class. Only quizzes completed in the class will be counted. Missed quizzes cannot be retaken. Attendance may therefore indirectly impact the grade. The submission deadlines for the assignments must be adhered to; late submissions will not be accepted. Substantial comments or answers during class count as participation. One participation point can be earned per session. The instructor will take notes of your earned points after each unit in class. Please make sure that your points are noted. Later recommendations cannot be considered. The points will the uploaded in your grade book at the end of a class the latest. 

The course can only be passed with a positive grade on the final exam! The final exam will take place on June 18th.

If one partial performance has been completed and the other partial performances are missing, the course can only be completed with a negative grade.

The course awards 5 ECTS credits.

Grading Scale:

For those registered for this course:

• Your attendance at the first session is mandatory to confirm your place in the course. If you cannot attend the first session, you must inform the course instructor in advance to retain your spot.
• If you no longer wish to participate in the course, please deregister immediately (via LPIS and email to the instructor) so your spot can be reallocated.

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From the CBK:

• Applied Microeconomics
• International Macroeconomics

• Via E-Mail: gabriele.tondl@wu.ac.at
• By appointment (via email) and after each course session.

You can write your bachelor thesis in the field of the elective international economics and be supervised by the instructor