Use the Tab and Up, Down arrow keys to select menu items.
Microeconomic analysis of international trade, trade policy, the welfare implications of trade and trade policy. The political economy of trade liberalisation.
ECON222 applies microeconomic theory to the analysis of international trade and trade policy. Lectures 1-3 give a brief introduction to issues in international trade. Lectures 4-12 look at classical trade theories. We will look at some explanations of why countries engage in international trade. We will see that countries that differ either in technology or in input endowments gain from trading with each other, i.e. that trade is not a zerosum game but offers mutual gains. Gains from trade arise because it allows for countries to specialize in what they are relatively good at, i.e. where their comparative advantage is. We will discuss how trade affects the distribution of income within a country. In particular, we will see that some interest groups may lose from trade even if there are overall gains from trade.Lectures 13-14 discuss modern trade theories, which utilise models of imperfect competition and game theory. We will see that even countries that have the same technology and endowments, i.e. that do not possess a comparative advantage in anything, can gain from trade. Modern trade theories can explain why we observe intra-industry trade, i.e. countries exporting and importing the same or similar goods. Lectures 15-24 looks at what happens to the welfare of countries and its various interest groups when countries that already engage in trade start using trade policy (tariffs, quotas, export subsidies etc.) to limit trade flows. We will discuss the merits of the most common arguments for restricting trade. We will also analyse the welfare consequences of regional trade arrangements, i.e. free trade areas.
The broad objectives for the course are as follows:1. Be able to discuss the key post-WWII trends and institutions in international trade, as well as the past and present trade policy of New Zealand and its key export and import goods and markets.2. Be able to use the Ricardian and the Heckscher-Ohlin models to analyse trade patterns, the effects of trade on consumption, production and the welfare of the different interest groups and the countries as a whole.3. Be able to use basic New Trade Theory models to analyse intra-industry trade and to understand the rationale of infant industry protection.4. Be able to define and analyse the welfare effects of the most important trade policy instruments as well as regional free trade areas.
Students must attend one activity from each section.
Assessment In Te Reo MāoriIn recognising that Te Reo Māori is an official language of New Zealand, the University provides for students who may wish to use Te Reo Māori in their assessment. If you intend to submit your work in Te Reo Māori you are required to do the following:Read the Assessment in Te Reo Māori Policy and ensure that you meet the conditions set out in the policy. This includes, but is not limited to, informing the Course Coordinator 1) no later than 10 working days after the commencement of the course that you wish to use Te Reo Māori and 2) at least 15 working days before each assessment due date that you wish to use Te Reo Māori.
Krugman, Paul R. , Obstfeld, Maurice, Melitz, Marc J;
International trade : theory & policy
Feenstra, R.C. & Taylor, A.M. (2021) International Trade (5th Ed.): Macmillan
Domestic fee $893.00
International fee $4,200.00
* All fees are inclusive of NZ GST or any equivalent overseas tax, and do not include any programme level discount or additional course-related expenses.
For further information see
Department of Economics and Finance