For courses in international economics, international finance, and international trade.

International Economics: Theory and Policy provides engaging, balanced coverage of the key concepts and practical applications of the two main topic areas of the discipline. For both international trade and international finance, an intuitive introduction to theory is followed by detailed coverage of policy applications.

With this edition, the author team of Nobel Prize-winning economist Paul Krugman, renowned researcher Maurice Obstfeld, and Marc Melitz of Harvard University continues to set the standard for International Economics courses.

FeaturesThe text’s unified structure presents a balance of theoretical and practical coverage of both trade and finance. For each topic area, chapters on core theory are followed by a series of application chapters that confront policy questions using the newest empirical work, data, and policy debates. This structure enables students to grasp theoretical concepts and then see those same concepts in action, aiding retention and highlighting the relevance of course material.

The sections in the text’s first half provide engaging and practical coverage of the tenets and applications of international trade. Key coverage includes the following:
An integrated, empirical-based treatment of the latest models of trade, such as the gravity, Ricardian, factor endowments, and imperfect competition models.
A thorough discussion of the causes and effects of trade policy focused on the income-distribution effects of trade.
An emphasis on the potential substitutability of international trade and international movements of factors of production, featuring an analysis of international borrowing and lending as intertemporal trade - the exchange of present consumption for future consumption.

The content in the latter half of the text brings the concepts and applications of international finance to life. Highlights are as follows:

A unified model of open-economy macroeconomics that provides students with a cohesive approach to the theory, based on an asset-market approach to exchange rate determination with expectations in a central role.
A discussion of the international monetary experience that stresses the idea that different exchange rate systems lead to different policy coordination problems.
Give students learning tools to master course material Learning Goals list essential concepts so students understand what they need to take away from each chapter.
Case Studies illustrate theory using real-world applications and provide important historical context.
Special Boxes offer vivid illustrations of points made in the text, including President Jefferson’s trade embargo of 1807-1809, specific disputes over trade, the role of currency swap lines among central banks, and the rapid accumulation of foreign exchange reserves by developing countries.
200+ Captioned diagrams reinforce discussions in the text and help students in reviewing the material.
Summary and Key Terms. Each chapter closes with a summary recapping the major points to aid student review of the material.
Problems, many of which cite real data or policies, allow students to practice what they’re learning. They range from routine computational drills to more analytical questions and problems.
Further Reading sections at the end of each chapter provide annotated bibliographies of both seminal works and recent articles, encouraging students to explore the material further.