International Economics + Case studies in global Economics

This course is part of the training Bachelor in Business Management.

International Economics: 5
Case Studies In Global Economics: 5

Course level
Introductory or advanced

Course prerequisites (start competences)

Principles of Economics (Micro- and Macroeconomics)
Fundamental knowledge of Micro- and Marco-economics
Students at least in their second year
students are able to do research, make analyses and work on papers, assignments independently
students are able to work in team
students are generally able to adapt to foreign cultures
students are able to contribute to discussions in English
students are able to fluently read and write English
enthusiast, willing to learn
open minded
critical, yet not arrogant
eager to function in a multicultural environment
longing for international experience
willing to give and receive feedback; able to cope with negative feedback
stress resistant
motivated and not easily giving up
having an own opinion, while at the same time being able to listen to others

International economics
Course description and goals

The goal of this course is to help students understand the basics of international trade and the effects of various international economic policies on domestic and world welfare. The course highlights sources of comparative advantage, gains and losses from trade, the impact of trade on economic growth, and effects of trade policy interventions such as tariffs, quotas, voluntary export restraints, and export subsidies. The students will also become familiar with the effects of international agreements on regional trade liberalization (such as EU and NAFTA) and on multilateral trade liberalization (e.g., WTO). Upon completion, students should be able to explain the balance of payments, how foreign exchange rates are determined and how the international monetary system functions.

Table of Contents

International Trade Theory
Early trade theories
Classical theory
Absolute Advantage
Comparative Advantage
The Standard Trade Model
The Heckscher-Ohlin-Samuelson (HOS) model
Modern trade theories
Internal economies of scale and the pattern of specialisation in free trade
External economies of scale
The Porter analysis
International Trade Policy
Trade Restrictions: Tariffs
The optimum tariff theory
Import tax
Export tax
Export subsidy
Nontariff Trade Barriers
Modern arguments relating to protection
The Political Economy of Protectionism
Infant industry argument
External economies of scale
Strategic trade policy
Trade policy and market failure
The practice of protection
Theory of effective protection
The role of GATT and WTO
Business, government and lobbying
Economic Integration
Forms of economic integration
Trade creation and trade diversion in customs unions
Dynamic benefits from customs unions
Growth and development with international trade
Growth and development over time
Trade theory and economic development
The contribution of trade to development
The terms of trade and economic development
Immiserizing Growth
Export instability and economic development
Import substitution versus export orientation
Trade liberalization and growth in developing countries
Current problems facing developing countries
Foreign Debt Problem
Trade problem
International Resource Movements and Multinational Corporations
Types of foreign investments
Data on international capital flows
Motives for international portfolio investments
Motives for direct foreign investments
Effects of international capital flows on investing and host countries
Reasons for the existence of multinational corporations
Problems created by multinational corporations in the home country
Problems created by multinational corporations in the host country
Motives and welfare effects of international labour migration
Exchange rates and the International Financial System
The Balance of international payments
Purchasing-Power Parity and exchange rates
The International Monetary System
Fixed exchange rates
Flexible/Floating exchange rates
Managed exchange rates
Today’s Hybrid System
International Monetary Institutions after World War II
The International Monetary Fund
The World Bank
The Bretton Woods System

Teaching Method

The class sessions consist of a combination of lectures, discussion, and group exploration and problem solving sessions. Students are required to prepare a written analysis of case studies and present their results.
The instructor leads the ensuring  and qualified feedback from
Interactive lecture (50%)
Case Studies (25%)
Presentations (25%)

Course Material

Salvatore, Introduction to International Economics, (2005) pp. 1-246
Nordhaus/Samuelson, Economics (2004), pp. 612-635
Jepma, Jager, Kamphuis, Introduction to International Economics, (1996) pp. 56-86, 115-150, 187-219
Case study:
Vedpuriswar, A.V., The falling Dollar, distributed by the European Case Clearing House, England and USA (2005)
and three case studies from:
Issac, J. and Khader, A., Economic Crisis in India, Southeast Asia and Argentina, distributed by the European Case Clearing House, England and USA (2004)


Exam (70%)
Paper (20%)
Presentation (10%)

Case Studies in Global Economics

This course introduces globalization and democratization from an interdisciplinary perspective. It examines major changes to the global political economy and explores implications for local, national, regional, and international political and economic processes
Using the case method of instruction, students apply economic theory and empirical analysis to specific regions and organizations in developing and industrialized countries.
Students learn to understand the complicated causes, processes and effects of globalization, especially with regard to economic integration and the situation in developing countries.

Table of contents

Course participants are required to have previously attended Principles of Economics Topics and cases vary from year to year based on current economic developments. The most recently held course covered the following topics:
European Integration
History of the EU;
The monetary union – concept and problems,
Trade of the EU with other countries, The principle of subsidisation ,
The EU budget ,
The Common Market,
Common foreign and security policy, Development policy,
Social, regional, agricultural and environmental policies of the EU;
Development policies
What is development and how to measure it
Population growth
Theories to explain the effects of population growth for economic development
Population growth in China: causes, effects and government policy
Population growth in India: causes, effects and government policy
Education and health
The importance of education for economic and social development,
The educational situation of men and women: causes and effects,
The importance of health for economic and social development,
The role of the agricultural sector in economic development,
The employment situation in developing countries

The market economy approach in Hong Kong,
The role of the state in China,
The social market economy in Germany,
Financial Resources
The role of financial resources in development ,
Interest rate policy in developing countries and its effects ,
The role of microcredits: The Grameen Bank in Bangladesh,
Foreign Trade
The role of foreign trade in economic development
The strategy of import substitution
The strategy of export orientation
Foreign Aid
The role of foreign aid in economic development
German development assistance: the role of the GTZ, KfW and NGOs,
The role of the World Bank,
The Debt crisis in developing countries
Causes of the debt crisis in developing countries,
The recent debt crisis in Argentina,
The role of the IMF in solving this problem,
Global warming, energy policy, Kyoto etc.

Teaching Method

Using the case method of instruction, students apply economic theory and empirical analysis to specific regions and organizations in developing and industrialized countries.
Group work (10%)
Presentations, discussion & feedback (50%)
Interactive lecture (40%)

Course Material

Literature for Development Studies:
Lynn, S., Economic development – Theory and practice for a divided world (2003)
Information about European Union:
Three case studies from:
Issac, J. and Khader, A., Economic Integration, distributed by the European Case Clearing House, England and USA (2004)



Written case analysis (60%)
20 minute oral presentation of a case analysis and ensuing discussion (40%)


Any retake of the courses is generally only possible during the period of July 8 – July 31 following the winter term in which the RIBA courses have been taken the first time. Individual arrangements may only be fixed in direct contact between and mutual agreement of the failing students and the responsible lecturer. (Both the academic and institutional coordinators (Prof. Dr. Nagengast and Dr. von Randow) have to be informed.)

Information lecturer
Prof. Dr. Birgit Eitel