Courses Catalogue

International Trade Theory

COURSE CODE: ECO 2203
COURSE CREDIT UNIT: 3
ACADEMIC PROGRAMME: Business Administration (Finance & Banking)
COLLEGE/SCHOOL/FACULTY: College of Economics and Management
STATUS: Core
PROGRAMME TYPE: Undergraduate

Course Content and Outline

COURSE CONTENT

The nature of International Trade.

  • Internal and International trade
  • Salient features of International Trade, differences between internal Trade and International trade advantages of International trade Disadvantages of foreign trade.

The Theory of Comparative Advantages

  • The theory of comparative advantages. (The classical Theory of International trade comparative costs measure in terms of money.
  • Modern Theory of International Trade
  • General Equilibrium Approach
  • Heckscher – Ohlin Theorem – Factors – Price equalization theorem
  • An appraisal and Comparison between classical and modern theory of International trade.

Modern Theory of International Trade

  • General Equilibrium Approach
  • Heckscher – Ohlin Theorem
  • Factors – price equalization theorem
  • An appraisal and Comparison between classical and modern theory of International Trade.


Grains from Trade and Terms of Trade

  • Gains fromTrade
  • Distribution gains
  • Meaning trade
  • Factors influencing terms of trade.
  • Reasons for the unfavourable terms of trade of less developed countries (LDCs).
  • Effects of Tarriff on the terms of trade.
  • Effects of Devaluation on the term of trade.
  • Mechanism of International Payments
  • Instruments of external payments.
  • Foreign exchange market and its functions rate of exchange
  • Determination of exchange.
  • Equilibrium rate of exchange
  • Equilibrium rate of exchange.
  • Purchasing power parity (PPP)
  • Balance of payments Theory
  • Causes of Fluctuations in exchange rate system
  • Case for flexible exchange rates.

The balance of payments

  • Introduction
  • Structure of balance of payments
  • Balance of trade and balance of payments.
  • Balance of payments always balances equilibrium in the balance of payment
  • The types of disequilibrium in the balance of payments.
  • Fundamental disequilibrium.
  • Causes of disequilibrium
  • Measures for correcting disequilibrium
  • Deflation exchange depreciation
  • Devaluation
  • Exchange control
  • Non monetary measures.

Trade policy

  • Free trade versus protection
  • Advantages of protectionism
  • Role of protection in underdeveloped countries.

Protective Trade Devices

  • Tariffs and Quotas
  • Tariffs effects of tariffs
  • Import quotas
  • Types of import quotas
  • Effect of quotas
  • Quotas vs tariffs

Exchange Control

  • Meaning of exchange control.
  • Objectives of exchange control.
  • Merits of exchange control technical of exchange control.

The IMF and the problem of International Liquidity

  • Introduction
  • Achievements of the IMF
  • The problem of international liquidity IMF and International liquidity
  • Special drawing rights.

International Financial institutions

  • The World Bank
  • International Finance Corporation (I.F.C)
  • International Development Association (IDA)
  • Euro – Dollar Market

Prelude

·         The meaning of Euro – Dollar – Euro- Dollar market – benefits of the Euro- Dollar market- effects of Euro- Dollar market on International financial system.

·         General Agreement on Tarriffs and Trade

·         Origin of GATT

·         Objectives of GATT

·         Most Favoured Nations clause

·         Tarrif negotiations – the Kennedy round

·         General Agreement on Tarrifs and Trade

·         Origin of GATT – Objectives of GATT

·         Most favoured Nations clause

·         Tarrif negotiations

·         the Kennedy round

United Nations Conferences on Trade and Development

  • Introduction – Organization of the UNCTAD
  • Functions of UNCTAD,
  • UNCTAD and GATT appraisal of recommendations of UNCTAD- I
  • UMCTAD- II-
  • UNCTAD- III
  • UNCTAD- IV
  • UNCTAD – V
  • UNCTAD- VI
  • New international economic order.

MODE OF DELIVERY

  • Lectures
  • Reading assignments
  • Practical assignments
  • Field trips
  • Documentaries

INSTRUCTIONAL MATERIALS AND / OR EQUIPMENT

·         Whiteboard and Markers

·         Flip Charts

·         LCD Projectors

·         CDs, DVDs and Tapes