Political Economy of International Trade Relations

Relations:

It is not possible to register for the course 32BE-P-PETR-01 if the student is concurrently registered for or has already completed the course U16E0105 (mutually exclusive courses).

During a review of study plans, the course U16E0105 can be substituted for the course 32BE-P-PETR-01.

Course guarantor:

Helmuth Yesid Arias Gomez

Lecturer:

Helmuth Yesid Arias Gomez

Tutor:

Helmuth Yesid Arias Gomez

Supervisor:

Institute of Management Studies

Synopsis:

Throughout the course, an interesting contrast between the inspiring trade theory and the alternative instances of economic policy will be developed.

Several topics dealing with economic policy will be discussed: External Balance, Exchange Rate Policy, Free Markets vs Strategic Trade Policy.

A modern approach will tackle the Balance of Payment analysis, emphasising the good and service operations vs the capital flow detailed in the capital account transactions.

The methodology introduces to students the important section of International political economy (IPE) relating to international trade. The course will focus on core issues of international trade and domestic policies, such as diverse development strategies, the role of multinational corporations, and the policies of protectionism or free trade. A set of case studies relating to the present state of affairs of international trade will be analyzed, including the breaking issue of Strategic Trade Policy and the Industrial promotion, purposely implemented by developed countries.

Requirements:

Attendance will be mandatory, and participation in discussions will be encouraged, Students must be prepared beforehand for each session. The grading process will be based on the final exam, but for the preliminary assessment, the work at home will be considered.

Macroeconomics, Microeconomics, Fundamentals of Economics

Syllabus of lectures:

The student will be guided in consulting the information sources about International Trade and will be oriented for interpreting the statistical information. Data will be downloaded from EUROSTAT, CSO, IMF, and so on.

The student will recognize the widespread statistical data and will be able to interpret it. The economic policy analysis will provide the principles for understanding the formulation of policies, alongside.

During the term, the student will overhaul the tools of economic policy and will understand the past stances of policy, implemented during the international financial crises.

Syllabus of tutorials:

A comparison of different theoretical approaches inspiring the formulation of economic policy

The Ricardian Tradition and the subsequent development of the Hecksher Ohlin Model.

The New Trade Theory and the Evolution of Trade Patterns.

New Economic Geography and Regional Specialization

Intra-industry trade and the trade profile in the developed countries

Diverse explanations to international specialization and trade patterns

Exchange rate policy and International Trade

Diverse Regimes of Exchange-Rate Policy

The Optimum Currency Areas

Dollarization as a resort for stabilizing the economy

The impossible trinity and the macroeconomic policy

Macroeconomic consistency and External Sector

Monetary disarray and external crises

The Monetary Approach of Balance of Payments

Internal balances and extern sector results

The structure of the Balance of payments

The Current Account and the Capital Account of Balance of Payments

The validity of the Strategic Trade Policy

Free market principle vs Strategic Trade Policy

Study Objective:

The student should be competent to reconcile the long tradition in the field of the Theory of Trade,

with the practical cases related to specialization and participation in the settlement of trade transactions.

To compare the formulation of Economic Policy with the underlying theoretical frame inspiring the implementation of the Economic Policy.

To handle the political-economic framework for regulating and the support of international trade relations

comprehend crucial concepts relating to international trade relations

To be informed about some actual debates and topics relating to international trade

To understand the international trade operation, its principal actors, and some substantive political issues related to it

To keep up the case analysis illustrating the diverse stances of economic policy

Study materials:

Compulsory:

Paul Krugman (2024). Two Theories of Immaculate Disinflation, and Their Implications. Stone Center on Socio-Economic Inequality

https://stonecenter.gc.cuny.edu/two-theories-of-immaculate-disinflation-and-their-implications-paul-krugman/

Paul Krugman (2024). Can Trump Reduce the Trade Deficit? Stone Center on Socio-Economic Inequality

https://stonecenter.gc.cuny.edu/can-trump-reduce-the-trade-deficit-paul-krugman/

Paul Krugman (2023). Technology and Globalization in the Very Long Run. Stone Center on Socio-Economic Inequality. Working Paper Series # 63.

Joseph E. Stiglitz (2024). The Road to Freedom: Economics and the Good Society. W. W. Norton & Company

Robert W. Staiger (2022) A World Trading System for the Twenty-First Century (Ohlin Lectures). The MIT Press

Robert C. Feenstra, Alan M. Taylor (2021) International Trade. Worth Publishers Inc., U.S.; 5ª ed.

KRUEGER, Anne O. International trade: what everyone needs to know. New York, NY: Oxford University Press, [2020]. ISBN 978-0-19-090045-8.

Paul Krugman , Maurice Obstfeld , Marc Melitz (2022). International Trade: Theory and Policy, Global Edition 12th Edición. Pearson.

Marijn A. Bolhuis (2023) The Costs of Geoeconomic Fragmentation.

The Return of Industrial Policy. Finance and Development. International Monetary Fund. 60 (2).

Arias-Gomez, H. (2023). Space and Production Specialization. In: Arias-Gomez, H. & Antosova, G. (Ed). Considerations of Territorial Planning, Space, and Economic Activity in the Global Economy. IGI Global Publisher. Hershey.

Krugman Paul, Obstfeld Maurice and Melitz, Marc. (2017) International Economics. 10th Edition. Pearson

Paul Krugman (2008) The increasing returns revolution in trade and geography. Nobel Prize Lecture Stockholm.

Eichengreen, Barry (2019). Towards a New Enlightenment? A Transcendent Decade. Openmind. University of California, Berkeley. https://www.bbvaopenmind.com/wp-content/uploads/2018/12/BBVA-OpenMind-Barry-Eichengreen-The-Past-Decade-and-the-Future-of-the-Global-Economy.pdf

Royal Swedish Academy of Sciences. (2008). Trade and Geography Economies of Scale, Differentiated Products and Transport Cost. Internet site accessed on December 2021: http://nobelprize.org/nobel_prizes/economics/laureates/2008/index.html

Pflüger M. and Tabuchi T. (2016). Comparative Advantage and Agglomeration of Economic Activity. Institute for the Study of Labor. Discussion Paper 10273. Bonn.

Montiel Peter. (2009). International Macroeconomics. Wiley-Blackwell. New Jersey.

Brakman, Steven; Garretsen, Harry and van Marrewijk, Charles. (2009). The New Introduction to Geographical Economics. Cambridge University Press. ISBN: 9780521698030.

Steven Brakman and Harry Garretsen (2009) Trade and Geography: Paul Krugman and the 2008 Nobel Prize for Economics. Spatial Economic Analysis, Vol. 4, No. 1. Routlege. pp 5-23.

Recommended:

Arias-Gomez Helmuth Yesid & Antošová Gabriela (2023). Regional manufacturing in the Czech Republic. Urban, Planning and Transport Research. VOL. 11, No. 1. Taylor and Francis.

Eichengreen, Barry. (2018). The Populist Temptation: Economic Grievance and Political Reaction in the Modern Era. New York: Oxford University Press. Oxford

Jing Linbo (2017). The Development of the Strategic Trade Policy and Its Application in China. The Chinese Economy, 50. pp. 97-111

Cordes, Alexander, Gehrke Birgit, Rammer Christian, Roman Römisch, Schliessler Paula and Wassmann Pia (2016). Identifying Revealed Comparative Advantages in an EU Regional Context. The Vienna Institute for International Economic Studies. Research Report 412. Vienna. https://wiiw.ac.at/identifying-revealed-comparative-advantages-rcas-in-an-eu-regional-context-pj-121.html.

Bilgin Orhan (2012). Strategic Trade Policy Versus Free Trade. Procedia - Social and Behavioral Sciences 58. pp. 1283 - 1292.

Giancarlo Corsetti (2008). A Modern Reconsideration of the Theory of Optimal Currency Areas. Economic Papers Directorate-General for Economic and Financial Affairs. European Commission. Brussels. https://ec.europa.eu/economy_finance/publications/pages/publication12229_en.pdf

Agenor R, Montiel Peter (2002). Development Macroeconomics. Princeton University Press. New York.

Mankiw Gregory. Macroeconomics (2010). Worth Publishers.

Mundell Robert (2003) The Significance of the Euro in the International Monetary System. American Economist. Fall. 47,2. pp. 27-39.

Mundell Robert (1999) A reconsideration of the 20th Century. Nobel Prize Lecture Stockholm.

Note:

Attendance is mandatory. In case of collision with other subjects, the student must sign only one of both.

The exam will focus on the material discussed and practiced at the classroom. In the exam, no alternative material will be taken into account, but the evaluation assumes that the class material is the basis for preparing the exam.

AFTER THE PLANNED SCHEDULE FOR EXAMS, AND AFTER THE SUBSEQUENT OPPORTUNITIES FOR PRESENTING THE EXAM, NO FURTHER EXAMS WILL BE MADE.

The course provides the theoretical bedrock for interpreting breaking phenomena in the global economy. Trade transactions, capital flows, exchange rate movements, trends toward protectionism, free trade agreements, trade integration, etc.

During the class, a lecture will introduce the subject, and several practical cases will be analyzed. Graphic and mathematical problems will be included in the discussion as well.

The course will be held in English.

Time-table for winter semester 2024/2025:

	06:00–08:0008:00–10:0010:00–12:0012:00–14:0014:00–16:0016:00–18:0018:00–20:0020:00–22:0022:00–24:00
Mon
Tue
Wed
Thu	roomDEJ:409 Arias Gomez H. 14:15–15:45 (lecture parallel1) Dejvice roomDEJ:409 Arias Gomez H. 16:00–17:30 (parallel nr.101) Dejvice
Fri

Time-table for summer semester 2024/2025:

	06:00–08:0008:00–10:0010:00–12:0012:00–14:0014:00–16:0016:00–18:0018:00–20:0020:00–22:0022:00–24:00
Mon
Tue	roomDEJ:409 Arias Gomez H. 16:00–17:30 (lecture parallel1) Dejvice roomDEJ:409 Arias Gomez H. 17:45–19:15 (parallel nr.1) Dejvice
Wed
Thu
Fri

The course is a part of the following study plans:

• B-EM-P prezenční studium od 20/21 (compulsory elective course)
• B-EM-P prezenční studium od 21/22 (compulsory elective course)
• B-EM-P prezenční studium od 22/23 (compulsory elective course)