INTERNATIONAL TRADE THEORY AND POLICY

A COMPLETE TEXTBOOK WITH STUDY QUESTIONS

The following list includes 14 Chapters that cover a one-semester course introducing international trade theory and policy principles. It has been used in an intermediate course taught at George Washington University requiring principles of microeonomics as prerequisites. Instructors and students are welcome to use the material freely with appropriate attribution. - Steven Suranovic

1. International Trade Issues: History, Institutions and Legal Framework
2. A Pure Exchange Model of Trade
3. The Pure Exchange Model and Market Ethics
4. Production, Trade and Comparative Advantage
5. The Ricardian Theory of Comparative Advantage (Redux)
6. The Pure Exchange Model Again with Three Traders
7. Factor Mobility and Income Redistribution
8. The Heckscher-Ohlin (Factor-Proportions) Model 
9. Economies of Scale and International Trade
10. Trade Policy with Perfectly Competitive Markets
11. Domestic Policies and International Trade
12. Trade Policies with Market Imperfections and Distortions
13. Political Economy and International Trade 
14. Evaluating the Controversy between Free Trade and Protectionism 

 

Related Lecture Videos

The following lecture videos were recorded in the Fall of 2016.

1. Introduction to International Trade: History, Trade Law and the WTO
2. Trade and the Importance of Ethics
3. Production, Comparative Advantage and Income Redistribution
4. The Effects of Trade, Tariffs and Retaliations
5. The Effects of Export Subsidies and Political Economy Issues
6. Market Imperfections and Distortions
7. More Market Imperfections and Distortions

 

OVERVIEW

This textbook presents an overview of international trade theory and policy. The purpose is to explain how economic theory and policy analysis can help us to understand the economic opportunities and challeges the world will face in the future. Students will learn the reasons why countries trade and the effects of trade. They will also learn the effects of a variety of trade policies. Students will learn how economic models are constructed and applied to answer these questions.

LEARNING OUTCOMES

1. to understand the current controversies relating to trade policies, laws and institutions.
2. to be able to explain the distinction between comparative and absolute advantage.
3. to understand the multiple motivations for international trade
4. to understand the price and welfare effects of trade
5. to understand the effects of tariffs, import quotas, and export subsidies
6. to understand the effects of domestic policies on trade
7. to be able to give several examples of the theory of the second best.
8. to be able to provide arguments both supporting and opposing free trade.