International Economic Relations of the EU

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Course Information
Terms offered: 
Fall, Spring
Language of instruction: 

Introductory micro- and macroeconomics


This course focuses on the international economic relations of the European Union in real and monetary matters. Part one covers trade and monetary theory on an intermediate macroeconomic level illustrated by trade patterns, structures and other examples of the EU and the US. The major goal is to analyze the interdependencies on trade and money. The second part covers the EU Common Commercial Policy and the economic relations of the EU with its most important partners: the U.S., Japan, China, India, Russia and developing countries. 

Attendance policy: 

All IES Abroad courses require attendance and participation. Attendance is mandatory per IES Abroad policy. Any unexcused absence may count against your final grade. Any student who has more than three (3) unexcused absences will receive an “F” as the final grade in the course. Absences due to sickness, religious observances, and family emergencies may be excusable at the discretion of the Center Director. In the case of an excused absence, it is the student’s responsibility to inform the Academic Officer of the absence with an Official Excused Absence Form, as well as any other relevant documentation (e.g. a doctor’s note), and to keep a record thereof. This form must be turned in as soon as possible before the class, in the case of a planned absence, or immediately after the class, in the case of an unplanned absence, in order for the absence to be considered excused. It is also the student’s responsibility to inform the professor of the missed class.


The use of laptop computers during class is not permitted. Cell phones are to be switched off. Updated information on your course and readings can be found on the Moodle platform.

Learning outcomes: 

By the end of the course, students are able to:

  • Evaluate economic policy proposals for fostering international trade relations from the perspective of the European Union.
  • Express themselves as public or group speakers with regard to European Trade and Monetary relations.
  • Explain and predict trading patterns and future monetary developments of emerging economies.
Method of presentation: 

Lecture, discussions, presentations and ad hoc speeches.

Required work and form of assessment: 
  • Term paper - 25%
  • Midterm - 25%
  • Final exam - 25%
  • Participation - 25%

The participation grade consists of oral presentation of the term paper, homework and class participation. Students are required to complete all reading assignments and will be expected to demonstrate this through regularly assigned homework, pop quizzes and/or insightful and relevant contributions to in-class discussion. All of these components will count toward the class participation grade. 

Term Paper
The term paper should be 14 pages, double-spaced. Your term paper will be evaluated not only on the basis of content but also on correct structure and formatting. An outline of these requirements will be available to students as a guide. Shortcomings in any of these aspects will be reflected in the grade. To receive an ‘A’ on a term paper, students cannot neglect any of the given standards. The term paper covers the European debt crisis. Each student must present his/her results of the term paper in class. Deadlines and dates of presentations will be announced in class.

Learning Objective
The course is designed to strengthen the student’s ability to critically analyze economic phenomena of international trade relations. This objective will be strived in the foreground of “real” trade and monetary relations of the European Union with major trade partners, including the emerging economies. The challenges of the “developed world” in the field of economic policy and international policy coordination are subject of class discussions. Individually preferred readings on these topics are welcome to be discussed in class. 







I.Course Introduction: What is International Economics about?

Session 1

Introductory remarks

  • Krugman/Obstfeld 2009 (ch. 1, page 1-9)


II. Trade and Monetary Theory in International Economics

Session 2

The global monetary regimes and the European Monetary Union

  • Paul de Grauwe 2012 (ch.1)


Session 3

The effect of trade barriers, the WTO and the EU’s preferential trade agreements

  • Krugman/Obstfeld 2009 (ch. 8, pages 182-192)


Session 4

The economics of monetary union – Term paper preparation

  • Paul de Grauwe 2012 (ch. 2)

Session 5

How do we know that trade is good for us?

  • A. Smith 1776/1979 (ch. 1, page 13-27)
  • Gandolfo 2004 (ch. 13, page 207-212)

Session 6

National income accounting

  • Krugman/Obstfeld 2009 (ch. 12, pages 288-301)


Session 7

Balance of payments

  • Krugman/Obstfeld 2009 (ch. 12, pages 301-312)


Session 8

Exchange rates and interest parity condition I

  • Krugman/Obstfeld 2009 (ch. 13, page 317-343)


Session 9

Field Study


Session 10

Exchange rates and interest parity condition II

  • Article from The Economist

Session 11

Revision of all sessions held by Heiko (1, 3, 5, 6, 7, 8, 10)

  • Question sheet handed out in class

Session 12

Midterm exam based on all sessions held by Heiko (1, 3, 5, 6, 7, 8, 10, 11)


III.European Debt Crisis

Session 13

The financial and sovereign debt crisis 2007-2013

Term paper due

  • PowerPoint presentation

Session 14

Presentations and discussion on the European debt crisis (I)


Session 15

Presentations and discussion on the European debt crisis (II)


Session 16

Presentations and discussion on the European debt crisis (III)


Session 17

European debt crisis – a conclusion


Session 18

Future of European trade relations: Transatlantic Trade and Investment Partnership (TTIP)

  • Transatlantic Trade and Investment Partnership, European Commission 2013


Session 19

Revision of all sessions held by Ekki (1, 2, 4, 13, 14, 15, 16, 17, 18)


Session 20

Final exam based on all sessions held by Ekki (1, 2, 4, 13, 14, 15, 16, 17, 18, 19)



Required readings: 

Articles and other material distributed in class are required to be read. Please note that required readings may be supplemented with other resources, especially with respect to the current debt crisis.

  • El-Agraa, A., The European Union. Economics and Policies , 8th ed., Harlow, 2007
  • European Commission, Transatlantic Trade and Investment Partnership, Brussels 2013. 
  • Baldwin, R./Wyplosz, C., The Economics of European Integration, 2nd ed., Maidenhead, 2006
  • De Grauwe, P., The Economics of Monetary Union, Oxford, 2012
  • Gandolfo, G., Elements of International Economics, Berlin, 2004
  • Krugman, P.R./Obstfeld, M., International Economics, Theory and Policy, 8th ed., Reading, Mass., 2009
  • Peterson, J.; Shackleton,M., The Institutions of the European Union, 2nd ed., Oxford, 2006
  • Smith, A., An Inquiry into the Nature and Causes of the Wealth on Nations, Vol.1, Reprint, Oxford, 1776/1979