The International Economics
Study Center

Information for Instructors

These online notes can be used as the primary materials for a college-level international trade, international finance or a combined trade and finance course. In addition many lessons can be linked to supplement international economics, development and political economy courses. Dozens of professors currently use the site in their courses. Please consider adopting this site as your course text and you will save your students money! But, more importantly, students appreciate this material because it helps them to learn. Try it yourself!


Easy to Use

To use the Study Center's international trade text in your classes, simply create a course outline and include hyperlinks to the chapters (or pages) that you want your students to read. This is especially easy if you are using a courseware program such as Blackboard. For a sample syllabus for an MA-level trade course, CLICK HERE; For an undergraduate international finance course CLICK HERE; For an undergrauate trade/finance course CLICK HERE. You are welcome to use these syllabi as a base to create your own course. Simply download the page and revise with your own course information.

Students will gain quick and easy access to the material. If they do not wish to read the material online, they are welcome to print each page that has been assigned. Local access and easier printing is available if students purchase PDF files at the download center.

Notable Features Of the Online Texts

The international trade and international finance webtexts contain information found in a standard college-level textbook. The trade text covers the basic models like the Ricardian model, the Heckscher-Ohlin model, and economies of scale model. It covers trade policy analysis in both perfectly competitive and imperfectly competitive markets. The trade text also addresses current issues such as free trade area formations and administered protection policies. The finance text covers the interest rate parity and purchasing power parity theories of exchange rate determination, takes a exhaustive look at the pros and cons of trade imbalances and presents the well-known AA-DD model to explore the effects of fiscal and monetary policy under both fixed and flexible exchange rates. The finance section concludes with an evaluation of the pros and cons of fixed and floating exchange rates.

The webtext has many unique features. Some of these are listed below.

  • The site currently includes material at several levels of difficulty. Chapter summaries provide intuitive explanations for the main results of the chapter (e.g. see Section 40-0) These will soon be included for every chapter. Most of the material now in place is designed for the intermediate level although some sections are clearly more difficult than others. I will also be adding additional advanced material designed for the undergraduate or graduate students with a strong mathematics background. (e.g. see section 115) In this way instructors should be able to assign a collection of pages that is most suited to their students' backgrounds and to their own style of teaching.

  • The final trade chapter (120) presents a detailed economic argument supporting free trade. The argument uses many of the results explained in earlier chapters with hyperlinks back to the sections in the main text where the ideas are originally presented. The purpose of the chapter is to link the results of trade theory with perhaps the single most important trade policy issue; the debate between free trade and protectionism.

  • The materials can be used for a full semester trade course, a full semester finance course, or a one semester trade/finance course.
  • The finance text provides an extensive look at the issue of trade imbalances. Readers learn how to evaluate whether a country's trade deficit (or surplus) is dangerous, beneficial, or benign.

  • All arguments which demonstrate the possibility of a welfare-improving trade policy are explained in the context of the theory of the second-best. Trade economists have long understood these relationships but it is rarely covered in much detail in traditional trade textbooks. See the chapter on the infant industry argument for protection for an example of this application.

  • The welfare analysis in the Ricardian, Heckscher-Ohlin and specific factors models emphasize the redistributive effects of free trade by calculating changes in real incomes. Real wage changes are calculated in the Ricardian model, while changes in real factor returns in the H-O model are calculated by applying the Jones magnification effects. Simple derivations of the magnification effects are derived numerically by using the assumption of fixed coefficients.

  • The effects of many different trade policies are included in detail. Thus students can see the effects not only of tariffs, but of import quotas, voluntary export restraints, export taxes, export subsidies and voluntary import expansions.

  • Chapter 95 contains an evaluation of how domestic tax and subsidy policies can affect trade patterns between countries when a country is large in international markets. These impacts are often ignored in traditional trade textbooks but are increasingly important as large countries, such as the EU, Japan and the US, begin to complain more about each other's domestic agriculture policies, their labor policies and their environmental policies.


In order for the internet to realize its full potential, basic educational information must be made freely available. Students, instructors, researchers and others should be able to traverse from site to site, from idea to idea, without continually encountering barriers. Entry should not be prohibited to those who want only a sample of the material or who are uncertain about the quality of the content. With free entry to educational information sites, the web has the potential to stimulate a new wave of creative ideas in many disciplines.

If you have any questions or suggestions please contact me at smsuran@gwu.edu

Last Updated on 1/17/08