1、International Economicstheory and policyPaul R.KrugmanMaurice ObstfeldTutor:Dr Zhu rundonglGraduated from Wuhan University,School of Economics and Management,World Economics,lDoctor degree in economics.lResearch Interests:International trade theory and policy,regional economic integration.lPrefer wo
2、rds:Foreign serves China,maths serves economics,and learning Serves application.Chaper 1 Economy,Economics and International EconomicslWhat is the economy?What is Economics?lWhat is International Economics?What are the characteristics of it?lWhy should we study economics,particularly international e
3、conomics?lWhat are the benefits for our future work,study and life by learnning international economics?lwhat kind of preparation should be taken before learnning International Economics?lWhat should I do in the classroom?Economy is allocation of resources!lThe economy is in short the rational alloc
4、ation of limited resources,and to get the maximum output or revenue through labor.lKey points:1,the limited resources;2,the maximum output or revenue;3,rational allocation of resources.(The core of concept)Economics is the subject of study how to allocate the resourceslThe relations between the outp
5、ut and scarce resources/labor-Production Optimization Problem;lThe relations between the output and resolution of resource in different level of production-Industrial structure optimization problem;lThe relations between output and mobility of resources-Economic integration;lResearchs of mobility of
6、 research resources and the allocation of the resources-International Economics.International EconomicslThe world economy has become increasingly unstable,how to keep up with changes in the international environment has become the central issue for the States to develop business strategies and econo
7、mic policies to take into account.lNote:lChanges in the international environment will affect the mobility of resources,such as a countrys foreign policy would increase the resource flows.lDegree of adaptation to the international environment will determine how big the benefits of the world economy
8、can be shared.lStrategy and policy is to enable their own long-term benefits.Research Areas of International Economics lInternational trade lInternational moneyMain Elements of International Economics lGains from tradelTrade patternslTrade protection and trade freedom lInternational Balance of Payme
9、ntslExchange Rate DeterminationlInternational policy coordinationlInternational capital markets.What are the benefits for learnning international economics?lTrade and finance-shopping and plan,lFuture life,lFurure career.My Preparationsl1,understand the meaning of the economy,in study,living and wor
10、king in the future;l2,prepare the next chapter before class;l3,seriously necessary to listen and take notes,especially write down the key note of the content and conclusions;l4,review after-class by reading text-book and notes simultaneously,not only to remember but also to understand the content;l5
11、,be diligent in thinking,to be love of asking questions.What shall I do in class?lBring your text-book and a thirsty brain;lGood at notes is a basic study habits for a university student.lPlease ask if you do not know,at least in Mr.Zhus class.lThinking and debate should be the most important skills
12、 to learn;lWhen class is over,give Mr.Zhu a smile!The End of Ch.1Appendix 1 Gravity ModellThere is a strong empirical relationship between the size of a countrys economy and the volume of both its imports and its exports.lThe equation of Gravity Model:lTij=AYi Yj/DijlTij:value of trade between the two countries,lA:constant term,lYi,Yj:country i and js GDP,lDij:distance between country i and j.Log of EquationllnTij=lnYi+lnYj-lnDijlTo get the model more general,we get the more conplex form:llnTij=a0+a1lnYi+a2lnYj-a3lnDij+a4lnX1+End of Chapter 1
