AECO 26A00 - Trade & international finance

COURSE DESCRIPTION:

This course provides an introduction to two central dimensions of globalization: international trade and international finance. We will explore the fundamental determinants of the exchange of goods, services, and capital across countries, as well as the policies governments use to influence these flows.

The course draws on recent theoretical frameworks and empirical research to examine key globalization issues, including:

• How does today’s protectionist wave compare with that of the 1930s?
• Does globalization exacerbate wage inequality?
• How does firm market power shape international trade?
• What drives modern protectionist policies?
• How can we understand international financial flows?
• Is the International Monetary System still relevant today?
• What role does the U.S. dollar play in the global economy?
• Why do international financial crises occur so frequently?

The first part of the course focuses on international trade. The second part covers international finance, addressing topics such as financial globalization, capital flows, global imbalances, the role of the dollar, the international monetary system, and currency conflicts.

While the course is not highly formalized and primarily uses graphical analysis to explain theoretical concepts, students will need some familiarity with basic mathematical tools commonly used in economics.

All course materials (slides, tutorials, readings) will be available on the shared Drive.

Course Outline

Introduction

Lecture 1&2: International Trade and International Finance

• Two Waves of Globalization
• Backlash on Globalization
• The Almighty Dollar?

Part I : International Trade

Lecture 3 & 4: Gains from Trade, Comparative Advantages and Income Distribution

• Ricardo’s Theory of Comparative Advantages
• Hecksher-Ohlin-Samuelson
• Trade and Inequalities

Lecture 5: Firms and International Markets

Lecture 6: Trade Policies

Part II: International Finance

Lecture 7: Global Financial Markets

• Time and Money
• Basic and sophisticated assets

Lecture 8: Derivatives

• Options
• 007

Lecture 9, 10 & 11: International Monetary System

• Bretton-Woods and After Bretton-Woods (From the Gold Standard to the Golden Age?)
• China’s Success Story (revisited)
• South America : monetary experiments everywhere!
• The Euro: From the EMS to a single currency

Lecture 12: The Money Revolution

• Cryptocurrencies
• A Cashless Society?
• The end of traditional currencies?

AUCUN

The final exam accounts for 1/3 of the final grade; a continuous assessment accounts for the remaining 2/3.

The continuous assessment is computed as follows:

• 45% of the grade for the midterm exam,
• and 45% for the group presentation (4-5 students, topic of your choice, 30-min. presentation, at the end of the semester).