An aggregate is a multitude of economic subjects that share some common features. Economics notes on microeconomics and macroeconomics. July 31, 2019 chapters 1216 are preliminary and incomplete. Macroeconomics 1880 1900 1920 1940 1960 1980 2000 matthiasdoepke universityofchicago andreaslehnert boardofgovernorsofthe federalreservesystem andreww. The best ib economics notes and study guide for slhl. Trade is the exchange of products between countries. Trade 4 25 in the last 50 years, volumes of trade in the u. Theoretical models with firm heterogeneity melitz, marc 2003. Microeconomics deals with small segments of the society. Dornbusch, rudiger 1980 open economics macroeconomics, chapter 6, new york. Quizlet flashcards, activities and games help you improve your grades. When a firm or an individual buys a good or a service produced more cheaply abroad, living standards in both countries increase. Discuss whether the primary macroeconomic target of the govt should be low inflation.
Introduction to macroeconomics lecture notes robert m. Countries import products, that they do not specialize in and thus do not produce, to satisy the needs of their consumers. All countries can benefit from trading with one another because trade allows each country to specialize in doing what it does best. For instance, once you have studied this section of the course you will know about free trade, protectionism, exchange rates, the balance of payments, economic integration and, for hl students, the terms of trade. International trade theory it concentrates on the theoretical aspects of trade like reasons of trade, gains of trade etc. International trade theories notes definition and types. The exchange rate passthrough erpt is a measure of how responsive international prices are to changes in exchange rates. In this way, trade often raises the standard of living of both producers and consumers. A brief overview of the history of macroeconomics i classics smith, ricardo, marx did not have a sharp distinction between micro and macro. Lc o in the absence of trade, we expect relative prices to. Lecture notes international economics i economics mit.
Macroeconomics international trade and its significance. The protectionist issue is especially intense in the united states because of the trends illustrated by figure 11. Keynes is known as father of modern macroeconomics. It studies economic and political issues related to international trade.
A group of firms producing identical or closely related goods. Dsge model of international trade and macroeconomics. Inductive reasoning has failed in several occasions in economics. Effects of trade liberalization, journal of international economics 94. Theory and evidence, princeton university press, 2004. Measuring economic performance economic growth ch 12 economic growth. Increasing returns, monopolistic competition, and international trade, journal of international economics 4. Elements of advanced international trade yale economic. Learn macroeconomics ch international trade with free interactive flashcards. May 04, 2020 international trade is the exchange of goods and services between countries. Lc o in the absence of trade, we expect relative prices to equal relative costs and thus.
Ragnar frisch coined the words micro and macro in 1933 to denote the two branches of economic theory, namely, microeconomics and macroeconomics microeconomics. In the words of samuelson, no area of economics is today more vital and controversial than macroeconomics. International macroeconomics1 stephanie schmittgroh. International economics, upng semester 1 2015 3 compiled by michael cornish wages. Researchers were motivated by the large and growing volume of international trade in similar products intraindustry trade between similar countries, a phenomenon not adequately explained by traditional theory based on perfect competition. Basic books obstfeld, maurice and kenneth rogoff 1996 foundations of international macroeconomics, chapter 4, pp. The word micro is derived from the greek word mikros meaning small.
Topics include the current account ca and the capital and financial account cfa, sometimes called simply the capital account, and how the movement of goods, services, assets, and remittances appear in the bop. The international trade is basically the export and imports of goods and services to international borders on simple words exports and imports of goods and services with other countries. The files are available free online, or can be downloaded in pdf for a fee. Lecture notes international trade and international finance. It could also be used by graduate students seeking a refresher in advanced undergraduate macroeconomics. Ib economics revision notes are listed as in the official ib economics syllabus which can be found here. In this unit, youll learn about open economies, how a countrys transactions with the rest of the world are recorded in the balance of payments accounts, how market forces and public policy affect the foreign exchange market, and how changes in net exports and financial capital flows affect financial and goods markets. The program bridges an articial gap between elds by incorporating krugmanmelitz trade microfoundations and producer dynamics in the benchmark, dynamic macro model under uncertainty. This sparknote will address many of the questions about international trade that are. The range of circumstances under which international trade is beneficial is much wider than most people appreciate. Study of groups and broad aggregates of the economy. O theory international trade equilibriuminternational trade international trade is the exchange of. Macroeconomic performance employment and unemployment ch 11 employment and unemployment chapter 12.
In general, international trade allows countries to focus on the industries in which they can be most productive and efficient. International economics page 6 trade and development international trade is closely linked to development. There will be a closedbooks, closednotes final exam on. For instance, it is cheaper to grow tropical fruits in the warmer climates and import them than to. The proposal must be emailed to me as a pdf file by noon on friday, june. International economics revision notes michael cornish. Their main idea was that a country s wealth can be measured as the amount of gold or other precious metals held by the country. International trade involves the movement and exchange of physical goods, services, ideas, money and labour across international borders. Online text and notes in international economics the economics.
Macroeconomics has emerged as the most challenging branch of economics. Erpt is estimated using the following dynamic lags regression. Choose from 500 different sets of macroeconomics ch international trade flashcards on quizlet. Trade between countries with different characteristics the earliest trade theorists were a group of people known as the mercantilists. This book represents a substantial makeover and extension of the course notes for intermediate macroeconomics which have been provided publicly on eric simss personalwebsitefor several years. Different schools of theories are discussed in this section. Mcq revision video international trade subscribe to email updates from tutor2u economics join s of fellow economics teachers and students all getting the tutor2u economics teams latest resources and support delivered fresh in their inbox every morning. The balance of payments and exchange rates 375 21 economic growth in developing and transitional economies 401 glossary 423 index 429 photo credits 439 vi. Introduction anthony venables london school of economics houghton street london wc2a 2ae 2. For instance, it is cheaper to grow tropical fruits in the warmer climates and import them than to try. Childrens bookcomic book assignment on the federal reserve banking system. The term microeconomics and macroeconomics were first given by ragner frisch in 1933. International economics deals with the economic activities of various countries and their consequences.
Keynes, the general theory of employment, interest, and money 1936. Trading countries introduction facts theory gravity 5 25 major exporters in absolute value. This course focuses on the intersection of international trade and macroeconomics. The importance of macroeconomics on theoretical and practical reasons is clear from the following points.
In other words, international economics is a field concerned with economic interactions of countries and effect of international issues on the world economic activity. In this unit, youll learn about open economies, how a countrys transactions with the rest of the world are recorded in the balance of payments accounts, how market forces and public policy affect the foreign exchange market, and how changes in net exports and financial capital. Countries are able to specialise in the production of goods and services that they are best at which means costs tend to be less. International trade study guide by ployphailinn includes 14 questions covering vocabulary, terms and more.
International trade policy this area deals with the international rules and regulations regarding the flow of transactions. All values are expressed in terms of millions of ryo the ryo. Trade is the transfer of ownership of goods and services from one person to another domestic trade is the exchange of domestic goods within the boundaries of a country international trade is the transactions between residents of different countries imports the purchase of goods and services from abroad that leads to an outflow of currency. The continuous evolutionary behavior of international trade theories brings us back in the 1980s where kalvin lancaster and paul krugman introduced the concept of strategies, based on global level rivalries, targeting multinational corporations and the struggle needed in achieving higher advantages as compared to other international companies. Imports are the products and resources bought into coming into the country. Its purpose is to expose students to recent developments in this research area, to develop understanding of the interaction of micro and macro dynamics in international interdependence, and to stimulate ideas for dissertation research. June 25, 2014 1the seeds for this manuscript were lecture notes taken by alberto ramos in a course on international finance that mike woodford taught at the university of chicago in the winter of 1994. For international economics, as the name suggests, you will learn about how countries interact and trade with each other.
Motivation consider the handout labeled the first measured century. When conditions are right, trade brings benefits to all countries involved and can be a powerful driver for sustained gdp growth and rising living standards. Economics 2535 lecture notes advanced topics in international. Perfect prep for international trade quizzes and tests you might have in school. The international trade gives a support to economy and let the economy of country to stand on its foot. These strategies attempt to correct any inefficiency in the international market. Powered by create your own unique website with customizable templates. International trade and macroeconomic dynamics with. Lecture notes on international trade and imperfect competition. Two subfields are international trade and international finance. International trade is the exchange of goods and services between countries.
The govt has given the mpc an inflation target of cpi. Macroeconomic performanceinflation ch 10 inflation chapter 11. Most fast growing economies also have a dynamic trade sector. Lecture notes in macroeconomics university of houston. O theory international trade equilibriuminternational trade international trade is the. International trade principles of economics, 8th edition n. Find materials for this course in the pages linked along the left. It draws on krugman and obstfelds international economics. One way of expressing the gains from trade in goods and services is to distinguish between static gains i.