International Trade Theory and globalisation


Recent years have seen the emergence of significant anti-globalisation movements in parallel with major growth in commercial volumes and direct investments abroad. This course presents the basic theoretical elements that will enable these issues to be tackled under the best conditions.

More precisely, it presents theories that explain the existence of trade between nations or regions and the nature of these exchanges (inter- vs. intra-branch). It then explores the consequences of trade liberalisation on the welfare of regions, the remuneration of various aspects of production and inequality within and between regions. Traditional theories of trade based on the concept of comparative advantage are examined, together with new explanations for international trade under imperfect competition. The role of trade policy (tariff and non-tariff barriers) and the associated gains and losses are studied systematically in each of these analysis frameworks.



  1. Introduction: Thought and stylised facts
  2. Traditional theories of international commerce: exogenous specialisations –Technological differences and comparative advantage: the Ricardian model. Resources and trade: the Heckscher-Ohlin model; the specific factors model. Product life cycle theories. Optimal trade policies under perfect competition.
  3. International trade under imperfect competition: endogenous specialisations –The effects of international trade under imperfect competition. The standard models: the differentiation of goods and monopolistic competition; homogeneous goods and Cournot competition. Strategic trade policies.


Krugman, Melitz & Obstfeld, International Economics: Theory and Policy, 9ème Edition, Editions Pearson