International Economics Theory And Policy

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Timmy Tatel

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Aug 3, 2024, 11:54:24 AM8/3/24

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Some sections can be confusing here and there on the pdf version but the online version is well thought. The index is easy to use and effective. It's well organized, there are key takeaways and jeopardy questions at the end of each sections. I...read more

The book does not have enough current examples. For example, in the Economic Integration section (Chapter 9), I would have liked more detail and examples about each degree of integration, and perhaps updates on the NAFTA or the European Economic Union (Brexit).

The text is consistent throughout the chapters, the framework is mostly logical, except for Chapter 7 (Trade Policy Effects with Perfectly Competitive Markets). I would have expected more sub-categories, instead of 23 sections...

The structure is not completely logical. I would have liked a whole section on absolute advantage, instead of being just an introduction to competitive advantage. I don't find a "national output determination" chapter completely relevant in an International Economics textbook. this is not an issue though, as I will just skip this chapter (19).

Overall, this is a great textbook, it has more content than I will need for my undergraduate course. For anyone who would consider adopting this textbook, I would suggest to add some case studies for each chapter, as I found it lacking.

This text strives to reach a median between these two approaches. First, I believe that students need to learn the theory and models to understand how economists understand the world. I also think these ideas are accessible to most students if they are explained thoroughly. This text presents numerous models in some detail, not by employing advanced mathematics, but rather by walking students through a detailed description of how a model's assumptions influence its conclusions. Second, and perhaps more important, students must learn how the models connect with the real world. I believe that theory is done primarily to guide policy. We do positive economics to help answer the normative questions; for example, what should a country do about its trade policy or its exchange rate policy? The results from models give us insights that help us answer these questions. Thus this text strives to explain why each model is interesting by connecting its results to some aspect of a current policy issue. A prime example is found in Chapter 11 "Evaluating the Controversy between Free Trade and Protectionism" of this book, which addresses the age-old question of whether countries should choose free trade or some type of selected protection. The chapter demonstrates how the results of the various models presented throughout the text contribute to our understanding of this long-standing debate.

During the Great Depression of the 1930s, existing economic theory was unable either to explain the causes of the severe worldwide economic collapse or to provide an adequate public policy solution to jump-start production and employment.

In The Economic Consequences of the Peace in 1919, Keynes predicted that the crushing conditions the Versailles peace treaty placed on Germany to end World War I would lead to another European war.

No policy prescriptions follow from these three tenets alone. What distinguishes Keynesians from other economists is their belief in activist policies to reduce the amplitude of the business cycle, which they rank among the most important of all economic problems.

Even though his ideas were widely accepted while Keynes was alive, they were also scrutinized and contested by several contemporary thinkers. Particularly noteworthy were his arguments with the Austrian School of Economics, whose adherents believed that recessions and booms are a part of the natural order and that government intervention only worsens the recovery process.

Both Keynesians and monetarists came under scrutiny with the rise of the new classical school during the mid-1970s. The new classical school asserted that policymakers are ineffective because individual market participants can anticipate the changes from a policy and act in advance to counteract them. A new generation of Keynesians that arose in the 1970s and 1980s argued that even though individuals can anticipate correctly, aggregate markets may not clear instantaneously; therefore, fiscal policy can still be effective in the short run.

Do you want to have an influential role in shaping policy that has a global impact? Economics is about making good choices with limited resources. Navigating the field of international economic policy is exciting and exacting, as professionals tackle complex, nuanced scenarios with far-reaching implications.

The Master of Arts in International Economic Policy (MIEP) degree from the Elliott School of International Affairs at the George Washington University provides a strong foundation for those interested in pursuing challenging careers in international economics, development economics, and international business as students acquire hard skills and real-world work experience that gives them an edge in the increasingly competitive job market.

Students focus on policy-related training or pursue a STEM track with more technical training, which can be especially important for international students seeking an extra two years of work in the United States.

An MIEP degree from the Elliott School ensures you have the skills you need to help shape solutions to global economic challenges in the areas of government, finance, consulting, NGOs, and international organizations.

Network within a strong and diverse community of peers and faculty. Attending the Elliott School gives you access to other GW schools, faculty, and alumni. The connections you will make through GW and in D.C. will set you up for long-term success and an impactful career.

Students may apply to pursue a STEM track focusing on econometrics and economic modeling. Prerequisites include current knowledge of an introductory college level calculus class and demonstrated proficiency in intermediate micro and macroeconomic theory. STEM track students complete a separate capstone project with mathematical modeling and econometric analysis.

You will customize an area of professional specialization specific to your interests. This is mapped out in collaboration with your Program Director in your Plan of Study, and may include taking classes from other schools at GW. Examples of previous specializations include Economic Development, International Business and Finance, International Trade and Investment Policy, and Quantitative Analysis.

By being part of the Elliott School and the D.C. experience, you will have access to world-shaping speakers and guest lecturers. You will be able to attend events and classes at other GW schools; you can even pursue a dual degree.

Economists have had an enormous impact on trade policy, and they provide a strong rationale for free trade and for removal of trade barriers. Although the objective of a trade agreement is to liberalize trade, the actual provisions are heavily shaped by domestic and international political realities. The world has changed enormously from the time when David Ricardo proposed the law of comparative advantage, and in recent decades economists have modified their theories to account for trade in factors of production, such as capital and labor, the growth of supply chains that today dominate much of world trade, and the success of neomercantilist countries in achieving rapid growth.

Almost all Western economists today believe in the desirability of free trade, and this is the philosophy advocated by international institutions such as the World Bank, the International Monetary Fund, and the World Trade Organization (WTO). And this was the view after World War II, when Western leaders launched the General Agreement on Tariffs and Trade (GATT) in 1947.

However, economic theory has evolved substantially since the time of Adam Smith, and it has evolved rapidly since the GATT was founded. To understand U.S. trade agreements and how they should proceed in the future, it is important to review economic theory and see how it has evolved and where it is today.

Mercantilists believed that governments should promote exports and that governments should control economic activity and place restrictions on imports if needed to ensure an export surplus. Obviously, not all nations could have an export surplus, but mercantilists believed this was the goal and that successful nations would gain at the expense of those less successful. Ideally, a nation would export finished goods and import raw materials, under mercantilist theory, thereby maximizing domestic employment.

Then Adam Smith challenged this prevailing thinking in The Wealth of Nations published in 1776.[2] Smith argued that when one nation is more efficient than another country in producing a product, while the other nation is more efficient at producing another product, then both nations could benefit through trade. This would enable each nation to specialize in producing the product where it had an absolute advantage, and thereby increase total production over what it would be without trade. This insight implied very different policies than mercantilism. It implied less government involvement in the economy and a reduction of barriers to trade.

Thirty-one years after The Wealth of Nations was published, David Ricardo introduced an extremely important modification to the theory in his On the Principles of Political Economy and Taxation, published in 1817.[3] Ricardo observed that trade will occur between nations even where one country has an absolute advantage in producing all the products traded.