This course gives a detailed overview of both the traditional and the most recent theories of international trade. Its purpose is to provide the students with a “toolbox” that can later be used to treat various questions related to the determinants of international trade flows. While the emphasis is on the theoretical aspects of the field, we will systematically discuss how the main predictions of the studied models fit the data. For each workhorse model, we will try to provide a number of references which use that particular framework to ask more applied questions.
Part 1: Neoclassical trade models
1. Ricardian comparative advantage
2. Factor endowments and comparative advantage : The HOS model
3. Many goods and many factors
4. Empirical performance of neoclassical trade models
Part 2: Modern trade models
5. Trade under imperfect competition: From Krugman (1980) to Melitz (2003)
6. Heterogeneous firms: theory and evidence
7. Comparative advantage and barriers to trade: the Eaton Kortum (2002) model.
Part 3: Gravity and the Gains from Trade
8. Gravity equations: theory and estimation
9. Quantifying gains from trade
Part 4: The international fragmentation of the production process
– Feenstra R. Advanced International Trade: Theory and Evidence, Princeton University Press.s
– Gopinath, G., Helpman E. and Rogoff, K. (2014), Handbook of international economics, Vol. 4, Elsevier.