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The Importance of International Relations And Economics

By Yann, published on 11/07/2018 Blog > Academia > Economics > International Economics

International economics is one of the major branches of economic study and it’s easy to see why.

We live in an era of increased globalisation, as well as an era in which international trade and transactions are not only commonplace but are subject to scrutiny through various global institutions, such as:

Although many economics classes you take at school, or even at university, may focus on other economic topics and areas, such as behavioural economics or more general areas such as macroeconomics or microeconomics, that doesn’t mean that international economics isn’t an important economic theory.

As we will see below, often international economics is a hugely interesting theoretical topic for students to examine.

Crucially, the field examines current international political events, economic activity, and economic problems, whether that’s the latest developments regarding the United Kingdom’s proposed Brexit from the European Union or the United States’ latest changes to tariffs.

However, the discipline also brings together principles and approaches that you’ll learn in your studies about macroeconomics and microeconomics.

Of course, if the economics courses that you or your friends’ study don’t provide much emphasis on international economics, or you would like to learn more about this area, then you can always reach out to a tutor, such as a Superprof tutor, for help.

Superprof has a number of trained economics tutors who are experienced in teaching international economics, so there are plenty of tutors to choose from, whether you’d like private or group tuition, or whether you’d like to learn about:

  • The implications of economic crises on multinational businesses;
  • How international trade can impact national income; or
  • How financial markets are becoming increasingly globalised, and whether they should be subject to greater governance.

A group of businesswomen. Studying international economics can be satisfying. International economics is a field studied by many at school and university. (Source: CC0 1.0, geralt, Pixabay)

Breaking Down the Meaning of International Economics

International economics, like the other main fields in economics, is made up of many different theories and models, some more mathematical than others. It assesses the impact of trade and investment between countries, including international trade agreements or policies in place that can have an effect on said trade and overall economic growth.

International economics can also be considered as part of the sector of international politics and relations, which is discussed in further detail below.

Predominantly, international economics is broken down into two distinct areas – international trade and international finance.

International trade examines how goods and services move across international borders by applying a microeconomic framework that includes models and analysis. As such, it’s not uncommon, when examining international trade issues, to look at factors such as:

  • Supply and demand;
  • Customer and market behaviour;
  • Differences between countries’ trade policies; and
  • Trade quotas or trade negotiations in place and their consequences.

International finance, on the other hand, studies how capital flows between international borders by applying macroeconomic principles. Areas that fall within the remit of international finance are:

  • Foreign exchange rates and movements, including the differences between fixed and floating FX rates;
  • The balance of trade and payments between economies;
  • GDP, inflation, and employment rates, within a comparative international context.

As much of the foundations of international economics are based on principles that you would already be familiar with through your microeconomics and macroeconomics studies, it’s not too hard to learn about the basics of international economics quickly.

If you do need some help getting your knowledge of basic macro- or microeconomic principles up to scratch, then you may consider hiring an economics tutor to help you revise key topic areas before you dive into the complexities of international economics. Superprof has a range of economics tutors that are happy to give you a crash-course in economics or econometric principles if you do need someone to turn to.

The World Trade Centre in Colombo, Sri Lanka. The international economy is an important component of international finance and economics. International relations and economics are closely linked. (Source: CC BY 2.0, Andrew Fysh, Flickr)

International relations pairs nicely with the study of international economics and you can often see the two areas combined into a joint degree course.

The reason for this is simple enough – often political decisions have a wider impact on international trade and relationships. You need only look at the United States’ economic policies at the moment to see how changes to tariffs or their tax regime have impacted their relations with other nations.

Although international relations as a field often looks beyond purely economic factors, as the field also combines subjects as broad as history, politics, and to an extent psychology, economic policy certainly plays a role in how governments and international bodies alike:

  • interact;
  • co-operate; or
  • disagree with one another.

Indeed, strained relations between nations can lead to more a more negative economic outlook for the global economy.

Take, for instance, protectionist tariffs. When a country introduces a new tariff on imported goods, for example, steel, then this will have ramifications, both from a political as well as an economic perspective.

On the other hand, economic policies can sometimes be to the benefit of a number of international nations. One such example is the customs union in place within the European Union, which essentially allows goods to move within the customs union without being subject to any customs duties. This naturally encourages goods to flow between member countries and is also beneficial for importers and exporters of goods within the union.

Politically-speaking, such tariffs may damage international relations between countries, where tariffs are considered unfounded or excessive. Economically-speaking, there will also be an impact on the demand for the affected goods, as well as changes to the prices of those goods.

International economics can have an impact on diplomatic relations between countries. Diplomacy and international relations are closely associated with international economics. (Source: CC BY-SA 3.0, Nick Youngson, Alpha Stock Images)

Become Familiar with International Economics Theory and Policy

Although international economics can be a wide-reaching field, students of this particular branch of economics often feel satisfied to have taken on the challenge.

As international economics often impacts a country’s domestic policies as well as the international political landscape, students of international economics have a wide range of career opportunities available to them, whether that’s:

  • Working as an economic or policy analyst;
  • Writing economics articles as a journalist;
  • Putting together the latest policies at the civil service; or
  • Working within an international organisation, such as the WTO.

These opportunities can be further enhanced by combining international economics with another subject at university, such as international relations, finance, or business management.

The other benefit of studying international economics, whether at school or university, is the fact that you get to put into practice the micro- and macroeconomic theories that you’ve been taught previously.

Knowing basic economic terms and their uses, whether that’s gross domestic product, the importance of monetary and fiscal policy, or why interest rates fluctuate, provide a solid foundation upon which to build your knowledge of international economics.

If you combine existing economics knowledge with an awareness of current political events and global economic news, you’ll be well-placed to get the most out of your courses on international economics.

Even listening to daily news broadcasts, or reading popular economics blogs such as Freakonomics or the Economist, can really help improve your overall knowledge of current events, while providing you with relevant and up-to-date examples that you can use during your exams or essays.

However, sometimes it can be difficult understanding international economics and the economic issues and problems that this area of economics tackles. This is due to the fact that the field requires some basic understanding of micro- and macroeconomic concepts, while also drawing on other areas such as politics and international relations.

Understandably, if you haven’t studied these subjects before, it can be a struggle initially to come to terms with some core theories within international economics, such as global economic wealth. If you find yourself in this position, then not to worry, because there is another way to brush up on this fascinating area of economics.

Namely, if you do need a helping hand learning about international economics, or if you would like to talk to someone to find out a bit more about this field, then you could always reach out to an economics tutor. An economics tutor can answer any of your questions, and can also give you example questions and topics that you might cover during an international economics course.

If you are looking for a tutor, you can find a range of experienced teachers on Superprof that are ready to help. Once you enter in your postcode, you can be paired with suitable teachers within your local area, as well as tutors that are able to provide assistance remotely, through online tutoring sessions.

A tutor will give you a good understanding of the topic overall, and may even help you make an informed decision about whether this area of economics is one you’d like to study further, for example at university, or whether you’d actually be interested in taking economics and international relations as a joint degree course once you’ve finished your A-Levels.

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