Course Description

The course will help us understand what determines the flow of goods across countries, i.e. international trade, and what determines the flow of savings and investments from one country to another, i.e. international finance. The subject is one of the oldest fields in economics and is extremely topical at the moment, with the ongoing debate on globalization, free trade agreements, the large current account deficits of the U.S., the prospects for exchange rates, and the calls for a new global financial architecture following the financial crises in East Asia and Argentina. In the course we will both cover the basic tools and some topics of current interest.

During the class we will organize three or four class discussions on topics of interest. Two groups of 3-4 students will argue for different sides of the debate each time.


Krugman, Paul, and Maurice Obstfeld. International Economics: Theory and Policy. 6th ed. Boston, MA: Addison Wesley, 2003. ISBN: 0201770377.

The other references listed are available in the readings section. Some will be covered in class, some are for your own reading.


The grade will be based on performance in problem sets, a mid-term and a final exam and on class participation. The problem sets and class participation carry a total weight of 1/3. Cooperation on problem sets is explicitly encouraged. A group of up to 3 students may submit a joint answer to any problem set (i.e. one copy, the names of all persons in the group must appear at the top of each problem set, at the time when it is handed in). An in-class mid-term will be held in October. A 90-minute final exam will be held during exam week. The mid-term and the exam carry a weight of 1/3 each. They will cover the lectures, the readings, the problem sets, and other material handed out or discussed in class up to that time.

Problem Sets and Class Participation 1/3
Mid-term Exam 1/3
Final Exam 1/3