Global Economy: Notes for an Introductory Course

These notes introduce key themes in international economics, globalisation, and European integration. It begins with the foundations of trade theory, focusing on comparative advantage, resource endowments, and economies of scale as determinants of trade patterns. It then examines exchange rates, contrasting fixed and floating regimes, assessing evidence from advanced and developing economies, and analysing the functioning of foreign exchange markets. The section on international finance addresses global imbalances, external wealth, borrowing constraints, and the asymmetric positions of advanced and emerging economies, with particular attention to financial crises and sudden stops. The discussion of globalisation considers barriers to trade and finance, the role of international organisations, and the constraints of policy choice captured by Rodrik’s trilemma. The final section analyses the European Union, covering its historical development, institutional structure, policy framework, and monetary integration, with emphasis on the euro and the theory of optimum currency areas. Together, these notes provide an integrated overview of the analytical tools and empirical evidence needed to interpret contemporary developments in the world economy.