731325 Principles of commodity markets and trade policy

Semester hours
Lecturer (assistant)
Salhofer, Klaus
Offered in
Sommersemester 2023
Languages of instruction


Description and analysis of theoretical and empirical aspects of trade with (agricultural) commodities.
Concepts of classical trade theory (comparative advantages: differences in technology, differences in factor endowments, specific factors, differences in preferences, ...) and new trade theory (internal and external economies of scale).
Concepts of how prices are determined in commodity markets: long run factors: agricultural treadmill and population trap; short run factors: exogenous demand and supply shocks, cyclic price behavior (Cobweb Model), seasonal price fluctuations, stockholding.
Reasons and effects of trade policies (tariffs, quota, tariff rate quota, export tax, export subsidies, state trading, ...). Technical barriers of trade, preferential trade agreements, the World Trade Organisation (history, principles, rules, dispute settlement procedure, …)

Previous knowledge expected

Principles of Economics

Objective (expected results of study and acquired competences)

Upon successful completion of this module, students are able to understand economic arguments why countries engage in trade. What are the advantages and disadvantages of trade. Who wins and who looses. What er the effects of government trade policies on welfare and specific groups.
Moreover, they are able to understand the most important mechanisms of how prices are formed in international commodity marktes. What are the particular patterns of price movments in these markets.
This knowledge should enable them to better understand important social/political discussions about trade issues and make better economic decisions if they e.g. manage a farm or are employed by a firm along the food supply chain. Moreover, working with economic models trains logical reasoning.
You can find more details like the schedule or information about exams on the course-page in BOKUonline.