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751

This course will cover the topics of international trade. We will meet Tuesdays from 3:00 to 5:50.

12/1: A simple model of international trade - Ricardian two-sector model (loosely based on Chapter 1 of Feenstra).

19/1: It's the factors that matter! The Heckscher-Ohlin model. Many goods and many factors (loosely based on Chapter 2 of Feenstra).

26/1: Dixit-Stiglitz preferences and the New Trade Theory (a version of the Krugman '79 model of international trade).

2/2: The New New Trade Theory (I) (Pavcnik'02, a version of the Meltiz'03 model).

9/2: PROBLEM SET 1 DUE
The New New Trade Theory (II) (a version of  Chaney'08, Eaton and Kortum'02) and solution to Problem Set 1.

16/2: Reading week break. NO CLASSES.

23/2: Mid-term Exam

1/3: Trade Theory and Trade Facts (loosely based on Kehoe and Bergoeing '03) and solution to the mid-term Exam.

8/3:  Measuring observables in models and in the data (Gibson '08 and Brooks, Kehoe and Pujolas '15).

15/3: Trade in a dynamic framework (Bajona and Kehoe'08 and Alessandria, Choi and Ruhl'15).

22/3: The Welfare Gains from Trade (Arkolakis, Costinot and Rodriguez-Clare '12).

29/3: PROBLEM SET 2 DUE
More on Gains (Brooks and Pujolas '15) and solution to Problem Set 2.

5/4: Open for flexibility purposes.

The course requirements are: two problem sets, each worth 10%, a mid-term worth 30% and a final exam worth 50%. The final exam is not cumulative.

References: 
  • Alessandria, George & Choi, Horag & Ruhl, Kim J., 2014. "Trade adjustment dynamics and the welfare gains from trade," Working Papers14-14, Federal Reserve Bank of Philadelphia.
  • Arkolakis, Costas & Arnaud Costinot & Andres Rodriguez-Clare, 2012. "New Trade Models, Same Old Gains?," American Economic Review, American Economic Association, vol. 102(1), pages 94-130, February.
  • Bajona, Claustre & Timothy J. Kehoe, 2010. "Trade, Growth, and Convergence in a Dynamic Heckscher-Ohlin Model," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 13(3), pages 487-513, July.
  • Bergoeing, Raphael & Timothy J. Kehoe, 2001. "Trade theory and trade facts," Staff Report 284, Federal Reserve Bank of Minneapolis.
  • Brooks, Wyatt J. & Timothy J. Kehoe & Pau S. Pujolas, 2015 "The Measured Productivity Disconnect," working paper.
  • Brooks, Wyatt J. & Pau S. Pujolas, 2015 "Nonlinear Gravity," working paper
  • Brooks, Wyatt J. & Pau S. Pujolas, 2015 "Dynamic Gravity," working paper
  • Chaney, Thomas 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-21, September.
  • Eaton, Jonathan & Samuel Kortum, 2002. "Technology, Geography, and Trade," Econometrica, Econometric Society, vol. 70(5), pages 1741-1779, September.
  • Feenstra, Robert C. "Advanced International Trade: Theory and Evidence," Princeton University Press, 2003.
  • Gibson, Mark J. "Trade Liberalization, Reallocation, and Productivity," working paper
  • Krugman, Paul R., 1979. "Increasing returns, monopolistic competition, and international trade," Journal of International Economics, Elsevier, vol. 9(4), pages 469-479, November.
  • Melitz, Marc J. 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
  • Pavcnik, Nina, 2002. "Trade Liberalization, Exit, and Productivity Improvement: Evidence from Chilean Plants," Review of Economic Studies, Wiley Blackwell, vol. 69(1), pages 245-76, January.