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                     M.A (ECONOMICS) 
                    MA FINALSEMESTER 
                 SUBJECT CODE: MAECO502 
                INTERNATIONAL ECONOMICS 
                              
        
        
        
        
        
        
        
        
        
        
        
        
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                                                             BOARD OF STUDIES 
                   1.      Prof. S.K Nayak                                                      
                           Head                                                                Chairman (Ex-officio) 
                           Dept. of Economics, RGU 
                                                                                               Member 
                   2.      Prof. A. Mitra 
                           Dept. of Economics, RGU 
                                                                                               Member 
                   3.      Prof. (Ms.) V. Upadhyay 
                           Dept. of Economics, RGU 
                                                                                               Member 
                   4.      Prof. N.C Roy 
                           Dept. of Economics, RGU 
                                                                                               Member 
                   5.      Prof. M P Bezbaruah 
                           Dept. of Economics, 
                           Guwahati University, Guwahati 
                                                                                               Member 
                   6.      Dr. RajuMondal 
                           Dept. of Economics, 
                           Assam University, Silchar, Assam 
                                                                                               Member Secretary 
                   7.      Dr. LijumNochi 
                           Dept. of Economics, RGU 
                    
                    
                   Authors: - 
                   Prof. S.K. Nayak, Dept. of Economics, RGU & Dr. R.K. Mandal, Dept. of Economics, 
                   DNGC, Itanagar (Unit: I & II) 
                   Prof. S.K. Nayak, Dept. of Economics, RGU & Dr. A.I. Singh, Dept. of Economics, DNGC, 
                   Itanagar (Unit: II & X) 
                   Dr. Lijum Nochi & Mr. Nyage Riba, Dept. of Economics, RGU (Unit: IV & V) 
                   Dr. D.B. Gurung, Dept. of Economics, RGU (Unit: VI, VII & VIII) 
                   Dr. Kaju Nath, NIT, Agartala (Unit: IX) 
                    
                    
                    
                    
                    
                    
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                         SYLLABI-BOOK MAPPING TABLE 
                                            PAPER NO: MAECO502 
                                        INTERNATIONAL ECONOMICS 
              SYLLABI                                                                    Mapping 
                                                                                         in Book 
              UNIT- I: COMPARATIVE COST AND OPPORTUNITY COST MODELS   
              Ricardo’s  Model  of  Comparative  Advantages  -  Modified  Ricardian  Theory 
              (Elaboration  and  Refinement)  -  Haberler’s  Opportunity  Cost  Theory  -  Trade 
              under Increasing, Decreasing And Constant Cost Conditions 
                            
              UNIT-II: TRADE, FACTOR ENDOWMENTS AND FACTOR PRICE                          
              Leontief  Paradox  -  Stolper-Samuelson  Theorem:  Factor  Price  Equalization 
              Theorem - International Trade and Imperfect Competition 
               
              UNIT- III: TERMS OF TRADE                                                   
              Meaning of Terms of Trade 
              UNIT-IV: TARIFF                                                             
              Arguments in favour of tariff - Arguments against tariff - Impact of tariff (partial 
              equilibrium analysis) - Impact of tariff(General Equilibrium Analysis) - Concepts 
              in Game Theory - Types of Games and Strategy - Free Trade and Protection - 
              Tariff and Trade Policies - Strategic Game Theoritic approach to Tariff: Brenda 
              Spencer Model        
               
              UNIT-V: TRADE AND ECONOMIC GROWTH                                           
              Growth in factor endowments and international trade - Rybzynski Theorem - 
              Stolper-Samuelson Theroam - Bhagwati’s view on immiserizing growth - 
              Technical changes and international trade 
               
              UNIT VI: BALANCE OF PAYMENT                                                 
              Meaning of Balance of Payment (BOP) - Components of Balance of Payments - 
              Relative  Importance  of  Current  account  and  Capital  Account  -  Balance  of 
              Payments adjustments: Absorption and Monetary Approaches 
              UNIT VII: FOREIGN EXCHANGE MARKET                                           
              Fixed and Floating exchange rate - Purchasing Power Parity - Interest Rate Parity 
              Theory 
              UNIT VIII: THEORY OF REGIONAL BLOCKS                                        
              Stages of Economic Integration - Trade Creation and Trade Diversion - Theory of 
              custom Union - Common market 
                                                                                          
              UNIT- IX: INTERNATIONAL TRADE AND MONETARY ORDER 
              Trade and Gold standard - Collapse of the Gold Standard in the Inter-war Period - 
              Bretton Woods System - IMF and World Bank - Fixed Exchange Rate and its 
              Working - Collapse of the Bretton- Woods System and emergence of the floating 
              exchange rate system - Multilateralism - GATT and WTO regime 
              UNIT-X: PROBLEMS OF POLICY IN AN OPEN ECONOMY                               
              Issues of policy instruments   
               
               
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                                                           Contents  
                  
                 UNIT- I: COMPARATIVE COST AND OPPORTUNITY COST MODELS 
                         1.0 Introduction 
                         1.1 Objectives 
                         1.2 Ricardo’s Model of Comparative Advantages 
                                 1.2.1 Explanation of the Theory 
                                 1.2.2 Gains from Trade and their Distribution 
                                 1.2.3 Criticisms 
                         1.3 Modified Ricardian Theory (Elaboration and Refinement) 
                                 1.3.1 Introduction of Transfer Costs  
                                 1.3.2 More than Two commodities  
                                 1.3.3 More than Two Countries  
                         1.4 Haberler’s Opportunity Cost Theory 
                         1.5 Trade under Increasing, Decreasing and Constant Cost Conditions 
                                 1.5.1 Trade under Constant Costs 
                                 1.5.2 Trade under Increasing Costs 
                                 1.5.3 Trade under Conditions of Decreasing Costs  
                         1.6 Summary 
                         1.7 Key Words 
                         1.8 Questions 
                         1.9 Questions and Answers 
                                 1.9.1 Short-Answer Questions (5 Marks) 
                                 1.9.2 Long-Answer Questions 
                         1.10 Suggested Readings 
                  
                 UNIT-II: TRADE, FACTOR ENDOWMENTS AND FACTOR PRICE 
                         2.0 Introduction 
                         2.1 Objectives 
                         2.2 Leontief Paradox 
                         2.3 Stolper-Samuelson Theorem: Factor Price Equalization Theorem 
                                 2.3.1 Criticism 
                                 2.3.2 Factor Price Equalisation Theory  
                                 2.3.3 Samuelson's Proof 
                                 2.3.4 Hicksian Proof 
                                 2.3.5 Criticisms to Factor Price Equalisation Theory 
                         2.4 International Trade and Imperfect Competition 
                         2.5  Summary 
                         2.6 Key Words 
                         2.7 Questions 
                         2.8  Questions and Answers 
                                 2.8.1 Short-Answer Questions 
                                 2.8.2 Long-Answers Questions 
                         2.9. Suggested Readings 
                  
                 UNIT- III: TERMS OF TRADE 
                         3.0     Introduction 
                         3.1     Objectives 
                         3.2     Meaning of Terms of Trade