Economics of international trade

This unit aims to deepen your understanding of globalisation with a particular focus on international trade. The unit begins by describing historical global patterns of international trade, investment and migration. It turns to the question of why countries engage in international trade. In answer, it covers the main theories of international trade that show how differences in technology or resources can create opportunities for mutually beneficial gains from trade. Within these theories, the unit provides insights into the relationship between trade and inequality within and across countries. Then the unit analyses the effects of tariffs, quotas and other policy instruments on welfare. Finally, the unit considers the effect of international agreements on countries’ welfare, labour and environmental standards.