IPE_1
Course Content
● Focus Areas:
○ Trade policy instruments.
○ Determinants and consequences of trade liberalization and trade barriers.
○ The role of global organizations like the WTO and key players such as the
U.S. and EU.
● Lecture Topics:
○ Introduction to international trade and trade policy.
○ Trade policy instruments (tariffs, non-tariff barriers, export promotion).
○ Multilateral and regional trade liberalization (e.g., WTO agreements,
Regional Trade Agreements).
○ Economic benefits and potential costs of trade.
Key Concepts
1. Trade Policy Instruments:
○ Tariffs: Taxes levied on imports, now generally low among developed
nations but impactful.
○ Non-tariff Barriers: Includes import quotas, export restraints, and technical
regulations.
○ Export Promotion: Policies like subsidies, export credit guarantees, and
export promotion programs.
2. Trade Liberalization:
○ Multilateral: Through WTO agreements reducing trade barriers for all
members.
○ Bilateral/Regional: Via Regional Trade Agreements (RTAs), often with
discriminatory effects.
3. Gains from Trade:
○ Empirical evidence shows trade openness correlates with higher GDP per
capita and faster economic growth.
○ Sources of gains: Productivity increases, lower prices, and greater product
variety.
4. Historical Insights:
○ Japan's transition from autarky to trade (1850s) boosted GDP by 8–9% in
the short term and 65% over two decades.
○ Protectionist policies in the 1930s (e.g., Smoot-Hawley Act) led to a
collapse in global trade, worsening the Great Depression.
5. Important Trade Theories:
○ Ricardian Model: Gains arise from comparative advantage.
○ Heckscher-Ohlin Model: Trade patterns based on resource endowments.
○ Krugman Model: Emphasizes increasing returns to scale and variety.
Course Content
● Focus Areas:
○ Trade policy instruments.
○ Determinants and consequences of trade liberalization and trade barriers.
○ The role of global organizations like the WTO and key players such as the
U.S. and EU.
● Lecture Topics:
○ Introduction to international trade and trade policy.
○ Trade policy instruments (tariffs, non-tariff barriers, export promotion).
○ Multilateral and regional trade liberalization (e.g., WTO agreements,
Regional Trade Agreements).
○ Economic benefits and potential costs of trade.
Key Concepts
1. Trade Policy Instruments:
○ Tariffs: Taxes levied on imports, now generally low among developed
nations but impactful.
○ Non-tariff Barriers: Includes import quotas, export restraints, and technical
regulations.
○ Export Promotion: Policies like subsidies, export credit guarantees, and
export promotion programs.
2. Trade Liberalization:
○ Multilateral: Through WTO agreements reducing trade barriers for all
members.
○ Bilateral/Regional: Via Regional Trade Agreements (RTAs), often with
discriminatory effects.
3. Gains from Trade:
○ Empirical evidence shows trade openness correlates with higher GDP per
capita and faster economic growth.
○ Sources of gains: Productivity increases, lower prices, and greater product
variety.
4. Historical Insights:
○ Japan's transition from autarky to trade (1850s) boosted GDP by 8–9% in
the short term and 65% over two decades.
○ Protectionist policies in the 1930s (e.g., Smoot-Hawley Act) led to a
collapse in global trade, worsening the Great Depression.
5. Important Trade Theories:
○ Ricardian Model: Gains arise from comparative advantage.
○ Heckscher-Ohlin Model: Trade patterns based on resource endowments.
○ Krugman Model: Emphasizes increasing returns to scale and variety.
