Lectures
Lecture 0. Introduction, Trade Facts, and Gains from Trade
Slides
Reading: A long run perspective on globalization
Feenstra, 2003, pp.179-188.
Additional: Leamer (2007)
Deardorff (1980), “The General Validity of the Law of Comparative Advantage,”JPE
Lecture 1. Ricardian Theory
Slides
Reading:
• Dornbusch, R., S. Fischer and P. Samuelson (1977), “Comparative advantage, trade, and payments in a Ricardian model with a continuum of goods,” AER, pp. 823-39.
• MMKM chapter 7.
• Samuelson (2004), "Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization," JEP, pp.135-146.
Additional:
• Eaton, J. and S. Kortum (2002), “Technology, geography and trade,“ ECMA, pp. 1741-1779.
• A. Costinot (2009), “An Elementary Theory of Comparative Advantage,” ECTA
• Grossman, G. and E. Rossi-Hansberg, “External economies of scale and trade redux,” QJE, pp.829-858.
• Jones, R (1961), "Comparative Advantage and the Theory of Tariffs: A Multi-Country, Multi-Commodity Model", The Review of Economic Studies, Vol. 28, No. 3, pp. 161-175.
• Wilson, A. (1980), "On the General Structure of Ricardian Models with a Continuum of Goods: Applications to Growth, Tariff Theory, and Technical Change", Econometrica, Vol. 48, No. 7, pp.1675-1702.
Lecture 2. Comparative Advantage and Gains from Trade (Empirics)
Slides
Reading:
• Bernhofen and Brown, “A Direct Test of the Theory of Comparative Advantage: The Case of Japan,” JPE, 2004, 48-67.
• Bernhofen and Brown (2005), “An Empirical Assessment of the Comparative Advantage Gains from Trade: Evidence from Japan,” AER, 208-25.
• Frankel, J. and D. Romer, “Does Trade Cause Growth?,” AER, 1999, 379-99.
Additional:
• Feyrer, J. (2009a), “Trade and Income – Exploiting Time Series in Geography,” NBER working paper 14910.
• Feyrer, J. (2009b), "Distance, Trade and Income – The 1967 to 1975 Closing of the Suez Canal as a Natural Experiment", NBER working paper.
• Rodrik and Rodriguez (2000), “Trade Policy and Economic Growth: A Skeptic’s Guide to the Cross-National Evidence.”
• Broda and Weinstein (2006), “Globalization and the Gains from Variety,” QJE, pp. 541-585.
Lecture 3. Factor Proportion Theory.
Slides
Reading:
• MKM chapter 8 (for HOS), Feenstra chapter 1 (2*2*2 model) and 2 (HOV and empirics) and chap. 4.
Additional:
• Jones, R., “The structure of simple general-equilibrium models,” JPE 1965, 557-572.J
• Jones, R. and P. Neary (1984), “The positive theory of international trade,” in JK, pp 14-21.
• Dornbusch, Fischer Samuelson (1980), "Heckscher-Ohlin Trade Theory with a Continuum of Goods", The Quarterly Journal of Economics, Vol. 95, No. 2, pp. 203-224.
• Leamer, E.E., The Craft of Economics: Lessons from the Heckscher-Ohlin Framework(Cambridge, MA: The MIT Press), 2012.
Lecture 4. Factor Proportion Empirics.
Slides
Reading:
• Bowen, Leamer and Sviekasuskas (1987), “Multicountry, multifactor tests of the factor abundance theory,” AER, 791-809.
• Trefler, D. "International factor price differences: Leontief was right!" JPE 1993
• Trefler, D. “The case of the missing trade and other HOV mysteries,” AER 1995
Additional:
• Leamer and Levinsohn (1995), “International Trade Theory: The Evidence,” in Handbook ofInternational Economics volume III, Grossman and Rogoff eds. [sections 1-3 only]
• Leontief, W.W., “Domestic Production and Foreign Trade: The American CapitalPosition Re-examined”, Economica Internazionale, 1954.
• Leontief, W.W., “Factor Propositions and the Structure of American Trade: FurtherTheoretical and Empirical Results”, Review of Economics and Statistics, 1956.
• Leamer, E.E., “The Leontief Paradox , Reconsidered,” Journal of Political Economy,1980, 88(3), 495-503.
• Helpman, E. “The Structure of Foreign Trade,” Journal of Economic Perspectives,Spring 1999, 13(2), 121-44.
Lecture 5. New Trade Theories.
Slides
Reading:
• Feenstra chapter 5
• Krugman, Paul R. 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," AER
Additional:
• Baldwin’s handout on Dixit-Stiglitz monopolistic competition .
• Helpman, Elhanan. Monopolistic competition in trade theory. International Finance Section, Department of Economics, Princeton University, 1990, memo.
Lecture 6. Economic Geography.
Slides
Reading:
• Krugman, Paul. "Increasing returns and economic geography." Journal of political economy 99.3 (1991): 483-499.
• Head and Ries (1999), “Rationalization effects of Tariffs reductions”, JIE.
Additional:
• Helpman, Elhanan, and Paul R. Krugman. Market structure and foreign trade: Increasing returns, imperfect competition, and the international economy. MIT press, Chapter 6, 1985.
• Baldwin et al. chapter on Core-periphery model.
• Head and Ries (2001), “Increasing Returns versus National Product Differentiation as an Explanation for the Pattern of US-Canada Trade”, AER
Lecture 7. Firms in International Trade (Melitz model).
Slides
Reading:
• Melitz, M. (2003). The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity. Econometrica,71(6), 1695-1725.
Additional:
• T. Chaney notes on Melitz model; Baldwin's summary of Melitz.
• Redding’s literature review on “new new” trade theories
Lecture 8. Firms in International Trade (Melitz extensions)
Slides
Reading:
• Melitz, Marc, Elhanan Helpman, and Stephen Yeaple. 2004. “Export Versus FDI with Heterogeneous Firms.” American Economic Review 94: 300-316.
• Melitz, Marc, Thierry Mayer, and Gianmarco Ottaviano. 2014. “Market Size, Competition, and the Product Mix of Exporters.” American Economic Review 104 (2): 495-536.
Additional:
• Melitz, Marc J, and Stephen J Redding. 2014. “Heterogeneous Firms and Trade.” Handbook of International Economics, 4th ed, 4: 1-54. Elsevier. Publisher's Version
Lecture 9. Firms in international trade (empirics)
Slides
Reading:
• Pavcnik, Nina. "Trade liberalization, exit, and productivity improvements: Evidence from Chilean plants." The Review of Economic Studies 69.1 (2002): 245-276.
• Bernard, Andrew B., J. Bradford Jensen, and Peter K. Schott. "Trade costs, firms and productivity." Journal of monetary Economics 53.5 (2006): 917-937.
Additional:
• Bernard, Andrew B., et al. "The empirics of firm heterogeneity and international trade." Annu. Rev. Econ. 4.1 (2012): 283-313.
Lecture 10. Gravity Equations.
Slides
Reading:
• Feenstra chapter 5
• Anderson, James E., and Eric Van Wincoop. "Gravity with gravitas: a solution to the border puzzle." American economic review 93.1 (2003): 170-192.
Additional:
• Head and Mayer (2013), Gravity Equations: Workhorse, Toolkit and Cookbook", in Handbook of International Economics.Publisher's Version
Lecture 11. Trade Policy (optimal trade policy)
Slides
Reading:
• MMKM chapters 15 and 16 (only parts covered in class)
• Feenstra chapter 9
Additional:
• Dave Donalson's slides on optimal trade policy.
Lecture 12. Trade Policy II (political economy).
Slides
Reading:
• MMKM chapters 15 and 16 (only parts covered in class)
• Feenstra chapter 9
Additional:
• Baldwin and Robert-Nicoud handout “Protection for Sale Made Easy”
Lecture 0. Introduction, Trade Facts, and Gains from Trade
Slides
Reading: A long run perspective on globalization
Feenstra, 2003, pp.179-188.
Additional: Leamer (2007)
Deardorff (1980), “The General Validity of the Law of Comparative Advantage,”JPE
Lecture 1. Ricardian Theory
Slides
Reading:
• Dornbusch, R., S. Fischer and P. Samuelson (1977), “Comparative advantage, trade, and payments in a Ricardian model with a continuum of goods,” AER, pp. 823-39.
• MMKM chapter 7.
• Samuelson (2004), "Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization," JEP, pp.135-146.
Additional:
• Eaton, J. and S. Kortum (2002), “Technology, geography and trade,“ ECMA, pp. 1741-1779.
• A. Costinot (2009), “An Elementary Theory of Comparative Advantage,” ECTA
• Grossman, G. and E. Rossi-Hansberg, “External economies of scale and trade redux,” QJE, pp.829-858.
• Jones, R (1961), "Comparative Advantage and the Theory of Tariffs: A Multi-Country, Multi-Commodity Model", The Review of Economic Studies, Vol. 28, No. 3, pp. 161-175.
• Wilson, A. (1980), "On the General Structure of Ricardian Models with a Continuum of Goods: Applications to Growth, Tariff Theory, and Technical Change", Econometrica, Vol. 48, No. 7, pp.1675-1702.
Lecture 2. Comparative Advantage and Gains from Trade (Empirics)
Slides
Reading:
• Bernhofen and Brown, “A Direct Test of the Theory of Comparative Advantage: The Case of Japan,” JPE, 2004, 48-67.
• Bernhofen and Brown (2005), “An Empirical Assessment of the Comparative Advantage Gains from Trade: Evidence from Japan,” AER, 208-25.
• Frankel, J. and D. Romer, “Does Trade Cause Growth?,” AER, 1999, 379-99.
Additional:
• Feyrer, J. (2009a), “Trade and Income – Exploiting Time Series in Geography,” NBER working paper 14910.
• Feyrer, J. (2009b), "Distance, Trade and Income – The 1967 to 1975 Closing of the Suez Canal as a Natural Experiment", NBER working paper.
• Rodrik and Rodriguez (2000), “Trade Policy and Economic Growth: A Skeptic’s Guide to the Cross-National Evidence.”
• Broda and Weinstein (2006), “Globalization and the Gains from Variety,” QJE, pp. 541-585.
Lecture 3. Factor Proportion Theory.
Slides
Reading:
• MKM chapter 8 (for HOS), Feenstra chapter 1 (2*2*2 model) and 2 (HOV and empirics) and chap. 4.
Additional:
• Jones, R., “The structure of simple general-equilibrium models,” JPE 1965, 557-572.J
• Jones, R. and P. Neary (1984), “The positive theory of international trade,” in JK, pp 14-21.
• Dornbusch, Fischer Samuelson (1980), "Heckscher-Ohlin Trade Theory with a Continuum of Goods", The Quarterly Journal of Economics, Vol. 95, No. 2, pp. 203-224.
• Leamer, E.E., The Craft of Economics: Lessons from the Heckscher-Ohlin Framework(Cambridge, MA: The MIT Press), 2012.
Lecture 4. Factor Proportion Empirics.
Slides
Reading:
• Bowen, Leamer and Sviekasuskas (1987), “Multicountry, multifactor tests of the factor abundance theory,” AER, 791-809.
• Trefler, D. "International factor price differences: Leontief was right!" JPE 1993
• Trefler, D. “The case of the missing trade and other HOV mysteries,” AER 1995
Additional:
• Leamer and Levinsohn (1995), “International Trade Theory: The Evidence,” in Handbook ofInternational Economics volume III, Grossman and Rogoff eds. [sections 1-3 only]
• Leontief, W.W., “Domestic Production and Foreign Trade: The American CapitalPosition Re-examined”, Economica Internazionale, 1954.
• Leontief, W.W., “Factor Propositions and the Structure of American Trade: FurtherTheoretical and Empirical Results”, Review of Economics and Statistics, 1956.
• Leamer, E.E., “The Leontief Paradox , Reconsidered,” Journal of Political Economy,1980, 88(3), 495-503.
• Helpman, E. “The Structure of Foreign Trade,” Journal of Economic Perspectives,Spring 1999, 13(2), 121-44.
Lecture 5. New Trade Theories.
Slides
Reading:
• Feenstra chapter 5
• Krugman, Paul R. 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," AER
Additional:
• Baldwin’s handout on Dixit-Stiglitz monopolistic competition .
• Helpman, Elhanan. Monopolistic competition in trade theory. International Finance Section, Department of Economics, Princeton University, 1990, memo.
Lecture 6. Economic Geography.
Slides
Reading:
• Krugman, Paul. "Increasing returns and economic geography." Journal of political economy 99.3 (1991): 483-499.
• Head and Ries (1999), “Rationalization effects of Tariffs reductions”, JIE.
Additional:
• Helpman, Elhanan, and Paul R. Krugman. Market structure and foreign trade: Increasing returns, imperfect competition, and the international economy. MIT press, Chapter 6, 1985.
• Baldwin et al. chapter on Core-periphery model.
• Head and Ries (2001), “Increasing Returns versus National Product Differentiation as an Explanation for the Pattern of US-Canada Trade”, AER
Lecture 7. Firms in International Trade (Melitz model).
Slides
Reading:
• Melitz, M. (2003). The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity. Econometrica,71(6), 1695-1725.
Additional:
• T. Chaney notes on Melitz model; Baldwin's summary of Melitz.
• Redding’s literature review on “new new” trade theories
Lecture 8. Firms in International Trade (Melitz extensions)
Slides
Reading:
• Melitz, Marc, Elhanan Helpman, and Stephen Yeaple. 2004. “Export Versus FDI with Heterogeneous Firms.” American Economic Review 94: 300-316.
• Melitz, Marc, Thierry Mayer, and Gianmarco Ottaviano. 2014. “Market Size, Competition, and the Product Mix of Exporters.” American Economic Review 104 (2): 495-536.
Additional:
• Melitz, Marc J, and Stephen J Redding. 2014. “Heterogeneous Firms and Trade.” Handbook of International Economics, 4th ed, 4: 1-54. Elsevier. Publisher's Version
Lecture 9. Firms in international trade (empirics)
Slides
Reading:
• Pavcnik, Nina. "Trade liberalization, exit, and productivity improvements: Evidence from Chilean plants." The Review of Economic Studies 69.1 (2002): 245-276.
• Bernard, Andrew B., J. Bradford Jensen, and Peter K. Schott. "Trade costs, firms and productivity." Journal of monetary Economics 53.5 (2006): 917-937.
Additional:
• Bernard, Andrew B., et al. "The empirics of firm heterogeneity and international trade." Annu. Rev. Econ. 4.1 (2012): 283-313.
Lecture 10. Gravity Equations.
Slides
Reading:
• Feenstra chapter 5
• Anderson, James E., and Eric Van Wincoop. "Gravity with gravitas: a solution to the border puzzle." American economic review 93.1 (2003): 170-192.
Additional:
• Head and Mayer (2013), Gravity Equations: Workhorse, Toolkit and Cookbook", in Handbook of International Economics.Publisher's Version
Lecture 11. Trade Policy (optimal trade policy)
Slides
Reading:
• MMKM chapters 15 and 16 (only parts covered in class)
• Feenstra chapter 9
Additional:
• Dave Donalson's slides on optimal trade policy.
Lecture 12. Trade Policy II (political economy).
Slides
Reading:
• MMKM chapters 15 and 16 (only parts covered in class)
• Feenstra chapter 9
Additional:
• Baldwin and Robert-Nicoud handout “Protection for Sale Made Easy”
