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IBF622 International Trade & Its Financing

This course will prepare students to understand international trade from multiple dimensions necessary to enhance the student’s preparation for working in fields of international banking and finance. The first part of the course will present mainstream theories of comparative advantage-based trade (why trade takes place). The second part of the course will analyze foreign commercial policy and give students an opportunity to explain particular determinants of actual trade flows. The third part of the course will explain and analyze multiple ways to hedge against uncertainties inherent in the financing and shipping of goods across borders. While some courses may study how to hedge risks from fluctuations in prices (e.g., exchange rates or prices of other goods), this course considers risks unique to the cross-border trade in goods: will an exporter follow through on his commitment to export? Will the shipped goods measure up to the criteria described in the contract? Will the importer pay on time? Will government agencies interfere with the transaction? This course will consider these questions as well as potential answers to them.

Pre-requisite: IBF604 Financial Econometrics I

Co-requisite: None (though IBF618 Financial Econometrics II is strongly recommended)