Introduction. International Trade Theory: World Trade: An Overview; Labor Productivity and Comparative Advantage: The Ricardian Model; Resources, Comparative Advantage, and Income Distribution; The Standard Trade Model; Economies of Scale, Imperfect Competition, and International Trade; International Factor Movements. International Trade Policy: The Instruments of Trade Policy; The Political Economy of Trade Policy; Trade Policy in Developing Countries; Controversies in Trade Policy. Exchange Rates and Open-Economy Macroeconomics: National Income Accounting and the Balance of Payments; Exchange Rates and the Foreign Exchange Market: An Asset Approach; Money, Interest Rates, and Exchange Rates; Price Levels and the Exchange Rate in the Long Run; Output and the Exchange Rate in the Short Run; Fixed Exchange Rates and Foreign Exchange Intervention. International Macroeconomic Policy: The International Monetary System, 1870–1973; Macroeconomic Policy and Coordination Under Floating Exchange Rates; Optimum Currency Areas and the European Experience; The Global Capital Market: Performance and Policy Problems; Developing Countries: Growth, Crisis, and Reform. Mathematical Postscripts.

For all readers interested in international trade and finance.

—Alan Deardorff, University of Michigan

“Krugman and Obstfeld present material in a clear and intuitive manner, leaving aside as much of the technical detail as possible. Students find the graphical analysis to be extremely helpful in understanding the material.”

—Robert G. Murphy, Boston College

“This is the leading undergraduate textbook in international economics. It offers a comprehensive and understandable exposition of the major topics in international economics by

two of the top scholars in the field.”

—Gerald Willmann, University of Kiel

“Krugman and Obstfeld is the leading textbook in the field because it approaches all aspects of international economics by utilizing both analytical and quantitative methods.”

—Iordanis Petsas, University of Scranton

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• Core theory chapters, followed by chapters that apply theory to major policy questions.
• Integrated treatment and empirical evidence of the latest models of trade, including the Gravity, Ricardian, specific factors, factor endowments, and imperfect competition models.
• Thorough discussion of the causes and effects of trade policy, focusing on the income-distribution effects of trade.
• Clear presentation of a unified model of open-economy macroeconomics based on an asset-market approach to exchange rate determination with a central role for expectations.

1. Introduction.

I. INTERNATIONAL TRADE THEORY.

2. World Trade: An Overview.

3. Labor Productivity and Comparative Advantage: The Ricardian Model.

4. Resources, Comparative Advantage, and Income Distribution.

5. The Standard Trade Model.

6. Economies of Scale, Imperfect Competition, and International Trade.

7. International Factor Movements.

II. INTERNATIONAL TRADE POLICY.

8. The Instruments of Trade Policy.

9. The Political Economy of Trade Policy.

10. Trade Policy in Developing Countries.

11. Controversies in Trade Policy.

III. EXCHANGE RATES AND OPEN-ECONOMY MACROECONOMICS.

12. National Income Accounting and the Balance of Payments.

13. Exchange Rates and the Foreign Exchange Market: An Asset Approach.

14. Money, Interest Rates, and Exchange Rates.

15. Price Levels and the Exchange Rate in the Long Run.

16. Output and the Exchange Rate in the Short Run.

17. Fixed Exchange Rates and Foreign Exchange Intervention.

IV. INTERNATIONAL MACROECONOMIC POLICY.

18. The International Monetary System, 1870-1973.

19. Macroeconomic Policy and Coordination Under Floating Exchange Rates.

20. Optimum Currency Areas and The European Experience. 

21. The Global Capital Market: Performance and Policy Problems.

22. Developing Countries: Growth, Crisis, and Reform.

Mathematical Postscripts.