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:
Prerequisites
valid for whole curriculum period:
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