This text is a rigorous introduction to international economics for upper-level undergraduates and above. The first half examines the causes and effects of international trade, how tariffs and other trade policies affect the gains from trade, and the ways in which governments try collectively to regulate those policies. The second half deals with monetary matters - the behavior of exchange rates, how trade and capital flows affect the functioning of monetary and fiscal policies, the causes and management of currency crises, and the new European Monetary Union (EMU). This fourth edition assesses the outcome of the Uruguay Round of trade negotiations, the work of the new World Trade Organization (WTO), and the challenges posed by regional trade blocs. It surveys recent theoretical work on currency crisis, examines recent crises in emerging-market countries and the role of the International Monetary Fund (IMF), and appraises innovations in exchange-rate arrangements, including the EMU and the use of currency boards by emerging-market countries. A problem set follows each chapter.
• Author internationally-renowned economist • Balances treatment of the theory and real-world policy, looking at real-world institutions • Problem sets after each chapter
Preface; Part I. Introduction: 1. The nation as an economic unit; Part II. International Trade Theory and Policy: 2. Comparative advantage and the gains from trade; 3. Economic efficiency and comparative advantage; 4. Factor endowments and comparative advantage; 5. Factor substitution and a modified Ricardian model; 6. Factor substitution and the Heckscher-Ohlin model; 7. Imperfect competition and international trade; 8. Trade and factor movements; 9. Instruments and uses of trade policy; 10. The evolution of trade policy; 11. The future of the trading system; Part III. International Monetary Theory and Policy: 12. The balance of payments and foreign exchange market; 13. Incomes and the current account; 14. Exchange rates and the current account; 15. Interest rates and the capital account; 16. Expectations, exchange rates, and the capital account; 17. Stocks, flows, and monetary equilibrium; 18. Asset markets, exchange rates, and economic policy; 19. The evolution of the monetary system; 20. The future of the monetary system; Appendices; List of abbreviations; Index.
'This book fills a very real gap: a textbook of more rigor than the leading undergraduate textbooks, while at the same time written in a clear, understandable style. Better than any other textbook I know, this work provides the student with a knowledgeable basis for setting textbook analysis in the context of the messy real world of political economy. It is appropriate for good, well-trained, relatively sophisticated undergraduate economics majors and for introductory graduate-level courses.' Polly Reynolds Allen, University of Connecticut
'This is a textbook rich in policy and institutional detail, yet rigorous in its exposition of economic ideas. Students will love the real-world orientation, while their professors will appreciate the no-nonsense approach to theory. Just as the author himself, this text is unsurpassed in erudition, wisdom, and practical insights.' Dani Rodrik, Kennedy School, Harvard University