International economics
International economics is the branch of economics relating to ideas such as International trade, Foreign Direct Investment (FDI), and the exchange rate and how they influence one another.
It deals with large scale, politically-sensitive topics such as:
- Outsourcing
- Exchange rate and exchange control policies (fixed peg vs. floating currency, etc).
- Competitive devaluation of an exchange rate, which US officials accused China of in 2004.
- Trade Liberalization, the case for and against tarrifs
- International labour standards
- Currency zones and economic integration, such as EC expansion, Socialist Economic Integration, and the NAFTA.
Much of modern International economics envolves technical macroeconomics models such as:
- International finance market models
- The Heckscher-Ohlin model of trade's effect on wages and interest rates
- The Balassa-Samuelson effect model of trade's effect on the exchange rate and why the PPP systematically deviates from the nominal currency exchange rate.
- The Open economy extension of IS-LM to link national and international economic models.