Economics: Trade Theory

<p>The course deals with the mechanisms behind and the effects of international trade. To begin with, the gains from trade, as well as a few key results relating to trade policy, are derived under the assumptions of a generic neoclassical general equilibrium model.</p> <p>Then a few specific varieties of that standard model are utilised to highlight effects of differences in technology and factor endowments between trading countries on trade flows as well as incomes and their distribution. In this context, claims about the effects of trade liberalization on inequality and poverty are analysed.</p> <p>The course also gives an introduction to more recent developments in trade theory (taking imperfect competition, product differentiation and increasing returns to scale into account) which add other explanations for trade and its effects as well as a perspective on the role of multinational corporations.</p>