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"Complementing trade theories with relevant trade empirics, this book covers three aspects of the study of International Economics: Pure theory of trade, trade policy, and theory of BoP and exchange rate. In the first part, it discusses the basic principles of international trade between dissimilar countries as well as between similar countries, and implications thereof in terms of welfare, income distribution and growth. In the second part a wide range of policy issues are analyzed including costs and benefits of unilateral trade restrictions and promotions through different instruments like tariff, import quotas, export subsidy and VER; reciprocatory trade policy choices through bilateralism and regionalism; product standards that regulate trade between developed and developing countries; and implications of capital inflow, FDI, fragmentation and global value chains. In the third part, the book discusses different currency and exchange rate regimes and their implications for a country's balance of payments and foreign exchange reserves. Drawing upon the basic theories, it studies expenditure-reducing and expenditure-switching policies to correct for BoP imbalances under a pegged exchange rate regime. Lessons learnt from some of the financial crises originating in the developing world under overvalued pegged exchange rate regimes with or without capital and exchange controls have been analyzed in the context of the Latin American debt crisis in the 1980s, BoP crisis in India in 1991, and the Asian financial crisis during 1997-98. Finally, some reflections on the choice of exchange rate regime and optimum currency area wind up discussions of monetary issues in international economics"--

International economic relations