1. Introduction: An overview of the world economy 2. Why countries trade 3. Comparative advantage and the production possibilities frontier 4. Factor endowments and the commodity composition of trade 5. Intra-industry trade 6. The firm in the world economy 7. International factor movements 8. Tarrifs 9. Nontariff distortions to trade 10. International trade policy 11. Regional economic arrangements 12. International trade and economic growth 13. National income accounting and the balance of payments 14. Exchange rates and their determination: A basic model 15. Money, interest rates, and the exchange rate 16. Output and the exchange rate in the short run 17. Macroeconomic policy and floating exchange rates 18. Fixed exchange rates and currency unions 19. International monetary arrangements 20. Capital flows and the developing countries.