International economics

International economics studies how goods, services, capital, currencies, and policies interact across national borders. It examines the causes and consequences of trade and financial integration.

Comparative advantage: The principle that trade can benefit parties when they specialize in goods with lower opportunity costs. It explains why countries can gain from trade even when one has an absolute advantage in every good.
Heckscher–Ohlin model: A trade model predicting that countries export goods intensively using their abundant factors of production. It links trade patterns to national differences in labor, capital, and other resources.
World Trade Organization: An intergovernmental organization that administers trade agreements and provides a forum for trade negotiations and disputes. Its rules shape the trade policies national governments can use.
Mercantilism: An economic doctrine that treats national wealth and power as dependent on accumulating precious metals and maintaining favorable trade balances. It contrasts with modern analysis of mutual gains from trade and aggregate welfare.
Balance of payments: A record of transactions between a country’s residents and the rest of the world over a period. Its accounts organize the trade and financial flows studied in international economics.
Mundell–Fleming model: An open-economy macroeconomic model analyzing fiscal and monetary policy under different exchange-rate regimes. It traces how policy effectiveness changes with capital mobility and the exchange-rate system.
International Monetary Fund: An international organization that supports monetary cooperation and lends to countries facing balance-of-payments problems. Its programs address crises involving currencies, external payments, and national adjustment.
Autarky: A state of national economic self-sufficiency with little or no international trade. It provides the no-trade baseline against which the gains from economic integration are measured.
Exchange rate: The price of one currency expressed in units of another currency. Currency prices shape trade costs, investment returns, and cross-border adjustment.
Purchasing power parity: The proposition that exchange rates adjust so comparable goods have equal prices across countries, after currency conversion. It offers a benchmark for explaining long-run exchange-rate movements.

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