Syllabus

LEARNING OUTCOMES

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

Email: pablo.warnes@aalto.fi

Teaching Assistant

Marika Viertola

Email: marika.viertola@aalto.fi

CEFR level (valid for whole curriculum period):

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

Teaching language: English. Languages of study attainment: English

CONTENT, ASSESSMENT AND WORKLOAD

Content

• 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
  

Workload

• valid for whole curriculum period:

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

DETAILS

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

• valid for whole curriculum period:

  Substitutes for Courses

Prerequisites

• valid for whole curriculum period:

  Prerequisites

FURTHER INFORMATION

Further Information

• valid for whole curriculum period:

  Teaching Period:

  (2020, 2021) - No teaching

  (2021, 2022) - Autumn II

  
  

  Course Homepage: https://mycourses.aalto.fi/course/search.php?search=31E00500

  
  

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

Details on the schedule

• applies in this implementation

  Week	Lecture number	Lecture Dates	Topic
  1	1	1.11.2021	Introduction and motivating questions and facts
  1	2	3.11.2021	Ricardian Model: Introduction and Comparative Advantage
  2	3	8.11.2021	Ricardian Model: Gains from Trade, comparative Statics and Empirics
  2	4	10.11.2021	Heckscher-Ohlin Model I
  3	5	15.11.2021	Heckscher-Ohlin Model II and empirical application / Trade Policy
  3	6	17.11.2021	Intra-industry trade and Increasing Returns to Scale (IRS)
  4	7	22.11.2021	Internal IRS: Full model
  4	8	24.11.2021	Geography in International Trade: the Gravity Equation
  5	9	29.11.2021	Firm heterogeneity and Melitz model
  5	10	1.11.2021	MNC and fragmentation of production
  6	11	7.12.2021	Globalization and Inequality
  6	12	8.12.2021	Globalization and Epidemics

  
  

Description