International Trade

= Syllabus = [[Media:Trade_syllabus.pdf]]

= News = Problem Set 2 is out.

= Lectures =
 * [[Media:TLecture1.pdf| Lecture 1: Preliminaries (new marked-up slides)]]
 * [[Media:TLecture2.pdf| Lecture 2: General results in trade theory (new marked-up slides)]]

What do countries trade?

 * [[Media:TLecture3.pdf| Lecture 3: Factor proportions theory (new marked-up slides)]]
 * [[Media:TLecture4.pdf| Lecture 4: Evidence on the factor proportions theory (new marked-up slides)]]
 * [[Media:TLecture5.pdf| Lecture 5: Technology-based theory (new marked-up slides)]]
 * [[Media:TLecture6.pdf| Lecture 6: Evidence on technology-based theory (new marked-up slides)]]

Why has trade increased so much?

 * [[Media:TLecture7.pdf| Lecture 7: Scale economies and trade (new marked-up slides)]]
 * [[Media:TLecture8.pdf| Lecture 8: Evidence on scale economies (new marked-up slides)]]
 * [[Media:TLecture10.pdf| Lecture 9: The extensive margin in trade (new marked-up slides)]]

Why do we still trade so little?

 * [[Media:Lecture-trade-costs.pdf| Lecture 10-11: Trade costs (new marked-up slides)]]
 * [[Media:Lecture-trade-policy1.pdf| Lecture 12: Trade policy (new marked-up slides)]]
 * [[Media:Lecture-trade-policy2.pdf| Lecture 13: Trade policy (new marked-up slides)]]

Does trade affect productivity?

 * [[Media:TLecture-melitz1.pdf| Lecture 14: Heterogeneous firms (new marked-up slides)]]
 * [[Media:TLecture-melitz2.pdf| Lecture 15: Heterogeneous firms (new marked-up slides)]]
 * [[Media:TLecture-xandnox.pdf| Lecture 16: A quantitative assessment of the Melitz model]] (The slides that are crossed out were skipped in class. They may still be useful to follow the reasoning.)
 * [[Media:TLecture-imports.pdf| Lecture 17: Imported inputs and productivity]]

Did globalization contribute to the rise in inequality?

 * [[Media:TLecture17.pdf| Lecture 19: Trade and inequality]]: Facts
 * [[Media:TLecture18.pdf| Lecture 20: Matching and inequality]]
 * [[Media:TLecture19.pdf| Lecture 21: Capital-skill complementarity from an international trade perspective]]
 * [[Media:TLecture22.pdf| Lecture 22: Trade and poverty]]

= Problem sets = Even though you are allowed to discuss the problems, please do write them up separately. You are not allowed to share your final solution with other students. If I see mindless copying, all parties involved will get zero credit.

'''Clarifications:
 * [[Media:PS_trade_costs.pdf|Problem Set 1]]. Due by 5.30pm, March 1.
 * 2012_Trade_Problem_Set_2. Due by 11.59pm, April 20.
 * 1) You can start from the Anderson-van Wincoop formula for bilateral trade, you do not need to derive it.
 * 2) You can assume revenue is exogenous (i.e., fixed when you do the comparative statics)

Practice problems

 * http://koren.hu/teaching/index.php5?title=International_Trade&oldid=4168#Problem_sets
 * http://koren.hu/teaching/images/b/b5/Smplxm.pdf

= Reading = Required reading is denoted by *. All other readings are recommended. Also check my del.icio.us bookmarks for recommended reading.

Lecture 1: Preliminaries

 * * Dixit and Norman, Chapter 2.
 * Aizenmann and Brooks, 2008. "Globalization and Taste Convergence: The Case of Wine and Beer" Review of International Economics

Lecture 2: General results in trade theory

 * * Bernhofen and Brown, 2004. "A Direct Test of the Theory of Comparative Advantage: The Case of Japan" JPE

Lecture 3: Factor proportions theory

 * * Helpman and Krugman, Chapter 1.
 * Deardorff, "Introduction to the Lerner diagram."

Lecture 4: Evidence on factor proportions theory

 * * Feenstra, Chapter 2.
 * Romalis, 2004. "Factor proportions and the structure of commodity trade." American Economic Review.

Lecture 5: Technology-based theory
with a Continuum of Goods,” American Economic Review, 67(5), 1977. 
 * * Dornbusch, Fisher and Samuelson, “Comparative Advantage, Trade, and Payments in a Ricardian Model

Lecture 6: Evidence of technology-based theory

 * * Glub and Hsieh, 2000. "Classical Ricardian Theory of Comparative Advantage Revisited"
 * Costinot, Donaldson and Komunjer, 2012. "What Goods Do Countries Trade? A Quantitative Exploration of Ricardo's Ideas"

Lectures 7 and 8: Scale economies and trade

 * * HK 1985, Chapters 6.1 and 6.2.

Lecture 10: The extensive margin in trade

 * * Hummels and Klenow, 2005. "The Variety and Quality of a Nation’s Exports". American Economic Review
 * Armenter and Koren, 2008. "A Balls-and-Bins Model of Trade". working paper

Lecture 11: Trade costs

 * * Anderson and van Wincoop, 2004. "Trade Costs". Journal of Economic Literature
 * Hummels, 2001. "Towards a Geography of Trade Costs". working paper.

Lectures 11 and 12: Trade policy

 * * Feenstra, Chapter 7 (up to page 220), Chapter 9
 * Broda, Limao and Weinstein. http://faculty.chicagobooth.edu/christian.broda/website/research/unrestricted/Broda_OptimalTariffs_ForthcomingAER.pdf

Lectures 14/16: Trade and productivity

 * * Melitz (2003), “The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity”, Econometrica
 * Armenter and Koren (2009), "Economies of Scale and the Size of Exporters"
 * Halpern, Koren and Szeidl (2009), "Imported Inputs and Productivity"

Lecture 17/19: Trade and inequality

 * * See the Stolper-Samuelson theorem in Feenstra, Chapter 1.
 * * Goldberg and Pavcnik (2007), "Distributional Effects of Globalization in Developing Countries" JEL