731325 Principles of commodity markets and trade policy

Semester hours
Lecturer (assistant)
Salhofer, Klaus
Offered in
Sommersemester 2019
Languages of instruction


Theoretical and empirical aspects of trade and price formation in (agricultural) commodity markets. 1.) Classical Trade Theory: absolute advantages, comparative advantage, Ricardian model, Heckscher-Ohlin model, Ricardo-Viner (specific factor) model, Theorems (Heckscher-Ohlin, Stolper-Samuleson, factor-equalization), Leontief Paradoxon 2.) New Trade Theory: internal and external increasing returns to scale, market power, monopolistic competition model, inter- vs. intra-industry trade; 3.) Determinants of long-run price trends and short run price fluctuations in commodity markets: agricultural treadmill, Malthus population trap, exogenous supply and demand shocks, impact of supply and demand elasticities, cyclic price behavior; 4.) Trade Policies: import tariff, import quota, tariff-rate-quota, export subsidies, export tax, technical barriers of trade; 4.) Trade Agreements: preferential trade agreements, WTO.

Previous knowledge expected

Principles of Economics

Objective (expected results of study and acquired competences)

The lecture aims to establish and reinforce the students’ understanding of basic elements and principles in the area of trade and price formation in (agricultural) commodity markets. After finishing this lecture, students should be able to better understand trade issues and their implications. Moreover, they should be able to better understand how (agricultural) commodity prices are formed in international markets and answer practical questions in this area in an appropriate and logically correct way.
You can find more details like the schedule or information about exams on the course-page in BOKUonline.