International Economy, The 3rd Ed.

Description: This introduction to international economics presents the relevant theory rigorously but accessibly and relies mainly on diagrammatic techniques, not mathematics. It covers trade theory and policy, including recent work on imperfect competition. There are chapters on the history of trade policy and topical issues such as NEOPHYTE, reforms in Eastern Europe, and the growing use of non-tariff barriers. Kenen also covers international monetary theory and policy, focusing on payments adjustment under fixed and floating exchange rates, the functioning of monetary and fiscal policies in open economies, and the effects of expectations on exchange-rate behaviour. There are chapters on the evolution of the monetary system and on current issues such as policy coordination and European monetary union. Kenen devotes special attention to the assumptions underlying basic propositions and covers policy issues extensively.

Review: 'A textbook of more rigour than the leading undergraduate textbooks, while at the same time written in a clear, understandable style and set in an institutional and policy context.' P. R. Allen, University of Connecticut

Contents: Preface; Part I. Introduction: 1. The nation as an economic unit; Part II. International Trade and Theory: 2. Comparative advantage and the gains from trade; 3. Economic efficiency and comparative advantage; 4. Factor endowments and comparative advantage; 5. Factor substitution and a modified Ricardian Model; 6. Factor substitution and the Hocksher-Ohlin Model; 7. Imperfect competition and international trade; 8. Trade and factor movements; 9. Instruments and uses of trade policy; 10. The evolution of trade policy; 11. The future of the trading system; Part III. International Monetary Theory and Policy: 12. The balance of payments and the foreign-exchange market; 13. Incomes and the current account; 14. Exchange rates and the current account; 15. Interest rates and the capital account; 16. Expectations, exchange rates and the capital account; 17. Stocks, flows and monetary equilibrium; 18. Asset markets, exchange rates and economic policy; 19. The evolution of the monetary system; 20. The future of the monetary system; Appendix A: Mathematical notes on trade theory and policy; Appendix B: Mathematical notes on monetary theory and policy; Appendix C: Outlines of answers to selected problems; List of abbreviations; Index.