Its been long recognized that various economies of the world
are interlinked through international trade. The experience of the past
several years, however, has demonstrated that this economic
interdependence is far greater than was previously realized. In this
context, the importance of international economic theory as an area
distinct from general economics hardly needs any mentioning. What gives
international economic theory this distinction is international markets
for some goods and effects of national sovereignty on the character of
economic activity. Wilfred Ethier's book, which incorporates recent
developments in the field, is an excellent addition to textbooks on
international economics for one- or twosemester undergraduate courses.
The book mostly covers standard topics. A distinguishing feature of this
book is its detailed analysis of the flexible exchange rates and a
discussion of the various approaches used for their determination.
Within each chapter, the author has extensively used facts, figures and
major events to clarify the concepts in the light of the theoretical
framework. The book also discusses, in a fair amount of detail, the
existing international monetary system and the role of various
international organizations.
