GRA 6284 Financial and Political Risk in International Trade
GRA 6284 Financial and Political Risk in International Trade
This course covers questions of risk and risk management in an international setting, both from a financial and a political economy perspective. It will teach the students
- the rationale for regulation and the status of the current legislative and institutional regime (the ‘why’ and ‘how’ of market regulation)
- the effect of existing regulation, including the failure or success of implementation, and distributional consequences (the ‘uncertainties’)
- how these uncertainties constitute risk for individual firms, and how to manage them in a company/organizational setting
Rather than treating these broad themes solely at a general level, the course will apply them to three sets of challenges that are particularly pertinent to business in today’s global economy. These challenges are:
- International trade and the key international regulatory institutions
- Exchange rates and currency fluctuations
- Sustainability
These challenges represent risks to all companies engaging in cross-border activities, and are therefore a useful starting point for anyone tasked with writing and implementing a risk management strategy. Moreover, they give us the opportunity to expose students to some of the contemporary debates not covered by other courses in this program.
After completed course the student will:
- have an advanced understanding of the complex political and financial aspects of today's globalised economy
- understand the challenges inherent in international trade and international cooperation
- understand the risk connected with major operational (e.g., currency fluctuations) and societal (e.g., the need for sustainable development) factors.
After completed course the student will:
- be able to analyse and react to regulatory developments with ramifications for international trade.
- be able to develop risk management strategies for companies with international economic activities in light of existing financial and legal structures, institutional development, political trends, and economic viabillity
This course allows the students to think critically and constructively around how to meet companies’ need for profitability and global need for sustainability, given the existing uncertainty.
International trade and institutions:
- Comparative advantages, scale economies and market power as sources of international trade.
- Role and history of institutions that regulate and monitor international trade (esp. the EU and the WTO)
- Evolution of the global trading system – fragmentation, growth of regional agreements, and its implications for (sustainable) development
Currency markets:
- Nominal and real exchange rates. Purchasing power parity. Determinants of exchange rates.
- Currency risk. Foreign exchange derivatives and hedging against currency risk.
- Exchange risk in examples – discussion of topical issues and recent events.
Sustainability:
- Global governance for sustainability (the ‘why’ and ‘how’ of international regulation)
- The international political economy of the sustainability challenge (the effect of implementation and distributional consequences, the ‘uncertainties’)
- The UN Sustainability Development Goals as driver for change (also for companies’ risk management)
The students will meet a mixture of individual and collective work forms. There will be group assignments with class presentations, where the students have the possibility of developing their arguments.
Please note that while attendance is not compulsory in all courses, it is the student’s own responsibility to obtain any information provided in class.
All courses in the Masters programme will assume that students have fulfilled the admission requirements for the programme. In addition, courses in second, third and/or fourth semester can have specific prerequisites and will assume that students have followed normal study progression. For double degree and exchange students, please note that equivalent courses are accepted.
Disclaimer
Deviations in teaching and exams may occur if external conditions or unforeseen events call for this.
| Assessments |
|---|
Exam category: Submission Form of assessment: Written submission Weight: 100 Grouping: Group (2 - 4) Duration: 1 Semester(s) Comment: The term paper consists of three parts corresponding to the three major themes in the course. Exam code: GRA 62841 Grading scale: ECTS Resit: Examination when next scheduled course |
| Activity | Duration | Comment |
|---|---|---|
Student's own work with learning resources | 85 Hour(s) | |
Teaching | 36 Hour(s) | |
Group work / Assignments | 9 Hour(s) | Preparation for class presentation. |
Submission(s) | 30 Hour(s) | Term paper (group). |
A course of 1 ECTS credit corresponds to a workload of 26-30 hours. Therefore a course of 6 ECTS credits corresponds to a workload of at least 160 hours.