The world that emerged from World War II was one in which trade, financial, and communication links between countries were limited. One decade into the 21st century, however, the picture is very different. Globalization has arrived, big time. International trade in goods and services has expanded steadily thanks to globally negotiated reduction in government trade barriers and the declines in shipping and communication costs. International trade in financial assets such as currencies, stocks and bonds has expanded at a much faster pace. There are also risks with the globalization, since problems in one part of the world can spread like a contagion to other parts, perhaps with no country immune. This raises a number of questions: What are the merits of free trade among nations compared with protectionism? What causes countries to run trade surpluses and deficits and how are such imbalances resolved? What causes financial crises in open economies, and hand how would governments tackle such problems? Studying ways to answer these and other related questions is at the heart of this course.