- Semester: III/IV
- Number of Credits: 4
Preamble
Regional/ preferential trading arrangements are increasingly becoming important. The course aims at studying in detail the theory underlying and the issues related to both regional trading and regional monetary arrangements. The course purports to apply econometric techniques in the form of gravity models to the study of regional arrangements. The pedagogy in the first two modules will rely on detailed study of selected chapters from the first two indicated references. Two real-world regional arrangements will be examined in detail in the last module, which may be tested, as a part of internal continuous evaluation, through a project on RTA/RCA.
Evaluation for 2009-10
The evaluation will be done through 40 marks of continuous evaluation and a 60 marks end-semester examination. The 40 marks evaluation will consist of a mid-term examination of 20 marks (two questions to be attempted over one hour) and a project of 20 marks on Modules 3 and 4. The project topics will be announced by the 4th teaching week of the semester and the projects should be in by the 10th teaching week. All modules will carry equal weight for the three hour end-semester examination.
Module 1: Customs Union Theory (16 Lectures)
Levels of economic integration – trade creation and trade diversion - economies of scale and customs union – intra-industry trade and customs union – customs union and terms of trade - customs union and welfare – dynamic aspects of customs union
Module 2: Theory of Currency Areas (8 Lectures)
Currency areas – optimum currency areas – contributions of Mundell, McKinnon and developments thereof
Module 3: Applications of Econometric Methods in RTA analysis with special reference to Gravity Models (12 Lectures)
The concept of gravity in economic analysis – theoretical underpinnings of gravity models – some applications of gravity models in regional trading and monetary analysis
Module 4: Contemporary Regional Trading and Monetary Arrangements (12 Lectures)
Regionalism and multilateralism in the context of WTO – Overview of regional trading arrangements in Asia - Any two of the following, as chosen by the course instructor, to be studied in details: SAARC and SAFTA, ASEAN & AFTA, European Union, NAFTA, regional trading arrangements in Africa, Africa-EU trade
References
1. |
Jagdish N. Bhagwati, Pravin Krishna and Arvind Pangariya, eds., Trading Blocs: Alternative Approaches to |
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Analyzing Preferential Trading Arrangements, Cambridge, Mass. & London, England: MIT Press, 1999 |
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(Modules 1 & 4) |
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2. |
Jacob A. Frankel, ed., The Regionalization of the World Economy, Chicago & London: University of |
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Chicago Press, 1998 (Modules 3 & 4) |
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3. |
Richard Baldwin and Charles Wyplosz, The Economics of European Integration, New York: McGraw Hill, |
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2004 (Modules 2 & 4) |
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