International Economics and Business

This course, as its name suggests, is comprised of two main sections, the first being international economics and the second being international business. In the first section, we focus our attention on the real (as opposed to monetary) side of international economics, i.e., international trade of goods and services. We start from the two neoclassical trade models (Ricardo and Heckscher-Ohlin) that were developed in the early parts of the 19th and 20th centuries. We then move to the more recent ?new? trade models which emphasize economies of scale, monopolistic competition, and firm heterogeneity. Finally, we introduce the empirical workhorses for analyzing trade, the gravity equation and the network framework. In the second section, we focus on foreign direct investment (FDI) and multinational enterprises (MNEs). We first cover some theoretical models of FDI, which are closely related to the trade models taught in the first section. Then we cover more specific topics such as global value chains (GVCs) and corporate networks. Finally, we discuss some future applications of Orbis data (rich information of MNEs).