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The University of Southampton

ECON3034 International Trade Theory & Policy

Module Overview

This module explores key questions in the area of international trade. Should countries trade freely with each other? What are the gains/losses from free trade and are they distributed evenly within the population? What are the various trade agreements (e.g. NAFTA) and what do they try to accomplish? What are the various policies (e.g. tariffs, import quotas) which aim to restrict trade and what are their implications for the consumers and the producers? These questions will be answered by analysing, among others, various well-known trade models such as that of Ricardo and Heckscher-Ohlin.

Aims and Objectives

Module Aims

The main aim of the module is to provide an analytical framework that can be used to answer the questions outlined in the Module Overview. More broadly, the module aims to provide a general discussion on the pros and cons of free trade and globalization.

Learning Outcomes

Learning Outcomes

Having successfully completed this module you will be able to:

  • Demonstrate knowledge and understanding of the main theories of international trade
  • Use a set of analytical techniques which can be used to understand the changing world economy and to analyse the actual problems in international economic policy
  • Demonstrate knowledge and understanding of how attitudes towards free trade and globalization are influenced by how the gains from free trade are distributed within the population


Its broad aim is critically to discuss the main theories of international trade and show their relevance in understanding the real world. In this module the lectures will be mainly theoretical and the classes will be used to answer homework questions and also to confront the theory with the real world using case studies from the textbook.

Learning and Teaching

Teaching and learning methods

The course is based on two lectures per week, for a period of 10 weeks. In these lectures the main models of international trade will be developed, together with discussing their application to real world examples and events. Moreover, there are 4 tutorials. The aim of the tutorials is to give you a sketch of the solutions for the assigned problem sets, while revising the topics covered during lectures.

Independent Study126
Total study time150

Resources & Reading list

P. Krugman and M. Obstfeld. International Economics Theory and Policy. 


Assessment Strategy

10% coursework; 90% two hour final examination. For the coursework component of this unit, students are required to submit 3 assignments. Each assignment is a problem set that contains exercises and small essay questions, which are directly related to the models and case studies that are covered in class. The aim of the assignments is to assess how well the students understand the material, that is, how well they are able to distinguish between the various models and use them to answer questions about different International Trade policies.


MethodPercentage contribution
Coursework 10%
Examination  (2 hours) 90%


MethodPercentage contribution
Exam 100%

Repeat Information

Repeat type: Internal & External

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