The study of international economics

Abstract

This chapter presents the study of international economics. International economics analyzes the nature and the causes and consequences of the movement of goods, services, and factors of production between countries and of the concomitant international flows of financial assets and liabilities. International economics is also concerned with the efficient allocation of scarce resources, and international trade differs from domestic trade in a number of ways. The extent to which a country is affected by the problems of international trade partially depends on the country's openness or involvement in international trade. A change in international trading conditions affects the prices of not only exports and imports but also of all exportables and importables. A careful study of international economics requires a sound knowledge of monetary economics, public economics, development economics, welfare economics, and economic policy. It offers the challenge of arriving at a synthesis of the knowledge gained from several important branches of economics. International economics is commonly divided into two parts, the theory of international trade and the monetary theory of international trade.