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BIRLA INSTITUTE OF TECHNOLOGY AND SCIENCE, PILANI

K.K.BIRLA GOA CAMPUS


INSTRUCTION DIVISION
SECOND SEMESTER 2010-2011
Course Handout (Part II)
Date: 04.01.2011
In addition to part I (General Handout for all courses appended to the time table) this portion gives
further specific details regarding the course.

Course No. : ECON C372


Course Title : International Trade and Balance of Payments
Instructor- in-charge : N.KUBENDRAN

1. Scope and objective of the course:

The objective of the course is to impart an understanding of the bases of trade, gains from trade,
trade policy, the dynamics and adjustment in the balance of payments. This could help students move
beyond recognition and towards an understanding to current and future international events during
the days of growing internationalization of economic activity.

2. Text Book :
T1. Salvatore, D, International Economics, Wiley Student Edition, 8th Ed, 2007.
3. Reference Books :
R1. Dennis, R. Appleyard and Alfred, J. Field, International Economics, IRWIN, Second Edition,
1995.
R2. Bo O Sodersten and Geoffrey Reed, International Economics, Macmillan, Third Edition,
1994.
R3. Lindert, P.H., Kindleberger, International Economics, AITBS, 8th Ed., 1998.
R4. Paul R. Krugman and Maurice Obstfeld,” International Economics: Theory & Policy”,
Addison wesley, 6th Ed. 2003.

4. Course Plan:
Lec. Learning Objectives Topics Ref.
No.
1 Introducing the concepts of international The International Economics and Ch.1 (T.B)
economics Economic theory
2-3 Basis of International Trade Early Trade Theories Ch.2 (T.B)

4-5 To introduce the concepts of Opportunity The Law of Comparative Advantage Ch.2 (T.B)
Cost in Trade, basis of trade and gains from
trade
6-7 The Basis for trade and gains from trade Offer Curve and Terms of Trade Ch.4 (T.B)
restated
8 Advanced Tool of International Trade Edgeworth Box Diagram & the Ch.3 (T.B)
Production Frontier
9-11 To investigate the Basis of comparative Heckscher - Ohlin (H-O) Model Ch.5 (T.B)
Advantage and trade
12-14 To analyse the Economics of Scale, Modern theories of International Ch.6 (T.B)
Imperfect Competition and Intra-Industy trade
Trade Models.
15-16 To analyse the impact of growth on trade and Economic growth , Income Ch.7 (T.B)
to discuss the issue of income distribution distribution and International Trade Notes
17-20 The theory of Tariff structure, rate of Trade Restrictions: Tariffs Ch.8 (T.B)
effective protection and Stolper-Samuelson
theorem
21-23 To discuss Import Quota, Export Barriers, Non tariff trade Barriers and Ch.9 (T.B)
Export Subsidies, and Dumping protectionism
24 To compare the Tariff and Non-Tariff Quota versus Tariff Ch.9 (T.B)
Barriers of trade

25-27 Trade Creation, Trade Diversion and theory Economic integration: custom union Ch.10(T.B)
of Second Best and free Trade Areas
28 To study trade and development, motives of Effects of International Trade, Ch.11 & 12
Foreign Direct Investment and Reasons for International resource Movements (T.B)
the existence of MNCs. and Multinational Corporations
29-30 To introduce the concepts of accounts to Balance of payment Accounts: Ch.13(T.B)
International Transactions &
ClassNotes

31-33 Purchasing Power Parity theory, Monetary Balance of payment Equilibrium Ch.15(T.B)
Approach to B o P and Exchange rate
overshooting
34-37 To study the dynamics of Open Economy Balance of payment adjustments; Ch.16 &17,
Macro Economics Income Adjustment Mechanism and (T.B)
Price Adjustment Mechanism
38 -40 To Evaluate Balance of Payment Adjustment International Monetary System: Past, Ch.21(T.B)
and to discuss the functions of International Present & Future
Monetary Institutions.
41 To discuss the Balance of Payment policy Mundell - Fleming Model Ch.18(T.B)
issues and current issues of International
Trade and Balance of Payments
42 To Introduce the current issues of The Euro, Capital Account
International Trade and Balance of Payment Convertibility, South. East. Asia ClassNotes
Economic Crisis, Globalization,
SAARC, SAPTA.

5.Evaluation Schedule :
EC Evaluation Component Duration Weightage Date & Time Remarks
No. (%)
1 Test I 1Hour. 25 21/02/2011 (2:00-3:00 PM) Closed
Book
2 Test II 1Hour. 25 30/03/2011 (2:00-3:00 PM) Closed
Book
3 Continuous Evaluations/ 10
Assignments/ Projects ---- To be announced in the class room
and Seminars.
4 Comp. Exam 3 Hours 40 02/05/2011 (2:00-5:00 PM) Closed
Book

6. Chamber Consultation Hours: To be announced in class.


7. Notice concerning this course will be displayed on the Economics & Finance Group Notice Board.

Instructor-in-charge
ECON C372

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