Please note! Course description is confirmed for two academic years, which means that in general, e.g. Learning outcomes, assessment methods and key content stays unchanged. However, via course syllabus, it is possible to specify or change the course execution in each realization of the course, such as how the contact sessions are organized, assessment methods weighted or materials used.


The course introduces the students to international trade theory and applied (empirical) trade economics at the level required for applied economists. It also provides a basic foundation of knowledge in international trade theory for more advanced PhD level courses.

Credits: 6

Schedule: 01.11.2021 - 16.12.2021

Teacher in charge (valid for whole curriculum period):

Teacher in charge (applies in this implementation): Marika Viertola, Pablo Warnes

Contact information for the course (applies in this implementation):

Responsible Instructor

Pablo Warnes

Office: Ekonominaukio 1, Room Y318


Teaching Assistant

Marika Viertola


CEFR level (valid for whole curriculum period):

Language of instruction and studies (applies in this implementation):

Teaching language: English. Languages of study attainment: English


  • valid for whole curriculum period:

    This course studies the determinants and effects of international trade and investment. We start with the classical models of trade theory, including the Ricardian theory of comparative advantage and the Heckscher Ohlin model. We then cover more modern trade models that incorporate economies of scale and imperfect competition. When presenting each theoretical model, we examine how they fare relative to the data, and contextualize them with specific empirical examples. In the last part of the course, we examine trade policy. We study the effects of different types of trade policies and ask what would be the optimal trade policies. Time permitting, we will also discuss the effects of the COVID-19 pandemic on international trade.


Assessment Methods and Criteria
  • valid for whole curriculum period:

    Examination, exercises, and class contribution.

  • applies in this implementation

    10% Research summaries

    40% Problem sets

    50% Exam

  • valid for whole curriculum period:

    In total 160h, consisting of lectures and exercises and independent work.


Study Material
  • valid for whole curriculum period:

    Krugman, P. R., Obstfeld, M., & Melitz, M. J. (2018). International trade: theory & policy. Pearson Education Limited.

    Feenstra, R. C. (2015). Advanced international trade: theory and evidence. Princeton university press.

    Other readings assigned during the course.

Substitutes for Courses


Further Information
  • valid for whole curriculum period:

    Teaching Period:

    (2020, 2021) - No teaching

    (2021, 2022) - Autumn II

    Course Homepage:

    Registration for Courses: In the academic year 2021-2022, registration for courses will take place on Sisu ( instead of WebOodi.

Details on the schedule
  • applies in this implementation

    WeekLecture numberLecture DatesTopic
    111.11.2021Introduction and motivating questions and facts
    123.11.2021Ricardian Model: Introduction and Comparative Advantage 
    238.11.2021Ricardian Model: Gains from Trade, comparative Statics and Empirics
    2410.11.2021Heckscher-Ohlin Model I
    3515.11.2021Heckscher-Ohlin Model II and empirical application / Trade Policy
    3617.11.2021Intra-industry trade and Increasing Returns to Scale (IRS)
    4722.11.2021Internal IRS: Full model
    4824.11.2021Geography in International Trade: the Gravity Equation
    5929.11.2021Firm heterogeneity and Melitz model
    5101.11.2021MNC and fragmentation of production
    6117.12.2021Globalization and Inequality
    6128.12.2021Globalization and Epidemics