Summary

Both the real trade and the monetary sections of this book are divided into a core of chapters focused on theory, followed by chapters applying the theory to major policy questions, past and contemporary. The text presents an integrated treatment of Ricardian, specific factors, factor endowments, and imperfect competition models of trade, along with in-depth analysis of empirical evidence. It covers the effects and causes of trade policy, including strategic trade policy, focusing on the income-distribution effects of trade. It aims to provide a unified model of open-economy macroeconomics based on an asset-market approach to exchange rate determination with a central role for expectations.