International Economics


Type of course: Lectures, seminars
Number of credits: 4
Hours (Lecture/Seminar/Lab): 15/15/0

Host institute: Institute of Economics and Social Sciences

Purpose and requirements of the subject:

The purposes of the subject are as follows:

  • Get acquainted with the basic concepts of international business relations and operations, as well as with the basic theoretical views of their development, and the impact and consequences of such relations on national economies.
  • Get acquainted with concepts such as international division of labour, the rise of global economy, the basic principles in the international flow of capital, goods and services
  • main features and characteristics of multinational enterprises, the process of regional and global integration.
  • analysis of various commercial theories, comparative costs, alternative cost principle, issues of commercial politics (tariffs, tolls, custom charges).
  • international financial issues including currency markets, exchange rates, the analysis of various speculative transactions, commercial and cash-flow balances, and the principles of international factor flows


  • The role of International Economics in the field of Economics, its focus, objective and methods. The significance of international business relations in global economics, interdependency. Mercantilism and the theory of the absolute advantage  (A. Smith).
  • Comparative cost theory (D. Ricardo). The mutual benefit principle, alternative cost theory. Full and partial specialization. The neo-classical theory of international commerce (Hecksher-Ohlin theory)
  • Economic growth and international trade
  • The impact of tariffs and customs on producers and consumers
  • International trade, as the engine of development. Developing countries
  • International flow of raw materials, working capital (FDI) transnational companies (TNC)
  • The European Unian as a basic model of regional integration
  • The concept of money and currencies – commercial and central banks.
  • Exchange rate risks and hedging. The European Monetary Union
  • Internationa financial activities – the role of banks and the stock exchange.
  • Chapters of international balance: commercial balances, capital balances and reserves
  • Currency rates and inflation
  • The role of international banking in financial crisis management: IMF, WB, ECB etc.


  • studying the given material, participation in lectures and consultations
  • solving short tests during the semester – the tests have preparatory, revision and assessing purposes for the closing exam

Method of teaching: Lectures and consultations

Supporting material:

  • International Economics, 9/E, Paul R. Krugman, Maurice Obstfeld, Marc Melitz, ISBN-10: 0132146657 • ISBN-13: 9780132146654, 2012 • Prentice Hall
  • special uploaded content in ILIAS electronic learning content management system


  • Students will write two mid-term exams (40 points each) and they will give presentations on relevant, actual topics in teams. (20 points).