| SES # | READINGS |
|---|---|
| I. Introduction: Trade facts and gains from trade | |
| 1 | Textbook treatment Dixit and Norman, 1980, pp. 71-80. Feenstra, 2003, pp. 179-188. Helpman and Krugman, 1985, pp. 28-29. Required readings Bernhofen, Daniel, and Charles C. Brown. "A Direct Test of the Theory of Comparative Advantage: The Case of Japan." Journal of Political Economy 112, no. 1 (2004): 48-67. Recommended readings Deardorff, Alan V. "The General Validity of the Law of Comparative Advantage." Journal of Political Economy 88, no. 5 (1980): 941-957. Dixit, Avinash, and Victor Norman. "Gains from Trade without Lump-Sum Compensation." Journal of International Economics 21, nos. 1-2 (1986): 111-122. |
| II. Technological differences: Ricardian models | |
| 2-3 | Textbook treatment Feenstra, 2003, pp. 1-4. Required readings Dornbusch, Rudiger, Stanley Fischer, and Paul A. Samuelson. "Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods." American Economic Review 67 (1977): 823-839. Eaton, Jonathan, and Samuel Kortum. "Technology, Geography, and Trade." Econometrica 70, no. 5 (2002): 1741-1779. Recommended readings Alvarez, Fernando, and Robert E. Lucas, Jr. "General Equilibrium Analysis of the Eaton-Kortum Model of International Trade." Mimeo, University of Chicago, IL, March 2006. (PDF)# Krugman, Paul R. "A 'Technology Gap' Model of International Trade." In Structural Adjustment in Advanced Economies. Edited by K. Jungenfelt and D. Hague. London, UK: Macmillan Press, 1986. pp. 35-49. Matsuyama, Kiminori. "A Ricardian Model with a Continuum of Goods under Non-homothetic Preferences: Demand Complementarities, Income Distribution, and North-South Trade." Journal of Political Economy 108 (2000): 1093-1120. McDougall, G. D. A. "British and American Exports: A Study Suggested by the Theory of Comparative Costs: Part I." Economic Journal 61 (1951): 697-724. Wilson, Charles. "On the General Structure of Ricardian Models with a Continuum of Goods." Econometrica 48, no. 7 (1980): 1675-1702. |
| III. Factor endowment differences: Heckscher-Ohlin | |
| 4-6 | Textbook treatment Dixit and Norman, 1980, chapters 4 and 5. Feenstra, 2003, chapters 1, 2, and 3. Helpman and Krugman, 1985, chapter 1. Jones and Kenen, 1984, chapter 1 (by Jones and Neary) and chapter 3 (by Ethier). Required readings Jones, Ronald W. "The Structure of Simple General Equilibrium Models." Journal of Political Economy 73 (1965): 557-572. Recommended readings Davis, Donald. "Intra-Industry Trade: A Heckscher-Ohlin-Ricardo Approach." Journal of International Economics 39 (1995): 201-226. Deardorff, Alan V. "Weak Links in the Chain of Comparative Advantage." Journal of International Economics 9 (1979): 197-209. ———. "The General Validity of the Heckscher-Ohlin Theorem." American Economic Review 72 (1982): 683-694. ———. "The Possibility of Factor Price Equalization, Revisited." Journal of International Economics 36 (1994): 167-175. Dornbusch, Rudiger, Stanley Fischer, and Paul A. Samuelson. "Heckscher-Ohlin Trade Theory with a Continuum of Goods." Quarterly Journal of Economics 95 (1980): 203-224. Helpman, Elhanan. "The Factor Content of Foreign Trade." Economic Journal 94 (1984): 84-94. Jones, Ronald W., and Jose A. Scheinkman. "The Relevance of the Two-Sector Production Model in Trade Theory." Journal of Political Economy 85 (1977): 909-936. Samuelson, Paul A. "Factor-Price Equalization Once Again." Economic Journal 59 (1949): 181-197. |
| IV. Empirical tests of the Heckscher-Ohlin model | |
| 7 | Textbook treatment Feenstra, 2003, chapters 2 and 3. Grossman and Rogoff, 1995, chapter 26 (by Leamer and Levinsohn). Jones and Kenen, 1984, chapter 10 (by Deardorff). Required readings Bowen, Harry P., Edward E. Leamer, and Leo Sveikauskas. "Multicountry, Multi-factor Tests of the Factor Abundance Theory." American Economic Review 77 (1987): 791-809. Davis, Donald R., and David E. Weinstein. "An Account of Global Factor Trade." American Economic Review 91, no. 5 (2001): 1423-1453. Trefler, Daniel. "International Factor Price Differences: Leontief was Right!" Journal of Political Economy 101, no. 6 (1993): 961-987. ———. "The Case of the Missing Trade and Other Mysteries." American Economic Review 85, no. 5: 1029-1046. Recommended readings Baldwin, Robert E. "Determinants of the Commodity Structure in U.S. Trade." American Economic Review 61, no. 1 (1971): 126-146. Brecher, Richard A., and Ehsan U. Choudri. "The Leontief Paradox, Continued." Journal of Political Economy 90, no. 4 (1982): 820-823. Choi, Yong-Seok, and Pravin Krishna. "The Factor Content of Bilateral Trade: An Empirical Test." Journal of Political Economy 112 (2004): 887-914. Harrigan, James. "Factor Endowments and the International Location of Production: Econometric Evidence for the OECD, 1970-1985." Journal of International Economics 39, no. 1 (1995): 123-141. ———. "Technology, Factor Supplies, and International Specialization: Estimating the Neoclassical Model." American Economic Review 87, no. 4 (1997): 475-494. Helpman, Elhanan. "The Structure of Foreign Trade." Journal of Economic Perspectives 13, no. 2 (1998): 121-144. Leamer, Edward E. "The Leontief Paradox, Reconsidered." Journal of Political Economy 88 (1980): 495-503.
Schott, Peter K. "One Size Fits All? Heckscher-Ohlin Specialization in Global Production." American Economic Review 93, no. 3 (2003): 686-708. |
| V. Intermediate input trade and wage inequality | |
| 8 | Textbook treatment Feenstra, 2003, chapter 4. Required readings
Grossman, Gene M., and Esteban Rossi-Hansberg. "Trading Tasks: A Simple Theory of Offshoring." National Bureau of Economic Research Working Paper No. 12721 (December 2006). Krugman, Paul. "Technology, Trade and Factor Prices." Journal of International Economics 50, no. 1 (2000): 51-71. Leamer, Edward E. "What's the Use of Factor Contents?" Journal of International Economics 50, no. 1 (2000): 17-49. Recommended readings
Lawrence, Robert Z., and Matthew J. Slaughter. "International Trade and American Wages: Great Sucking Sound or Small Hiccup?" Brookings Papers on Economic Activity 1993, no. 2 (1993): 161-210. Washington, DC: Brookings Institution Press. Zhu, S., and D. Trefler. "Trade and Inequality in Developing Countries: A General Equilibrium Analysis." Journal of International Economics 65, no. 1 (2005): 21-48. |
| VI. Imperfect competition: Theory | |
| 9-10 | Textbook treatment Dixit and Norman, 1980, chapter 9. Feenstra, 2003, chapter 5. Grossman and Rogoff, 1995, chapter 24 (by Krugman). Helpman and Krugman, 1985, chapters 3, 6, 7, 8, and 9. Jones and Kenen, 1984, chapter 7 (by Helpman). Required readings Brander, James, and Paul R. Krugman. "A Reciprocal Dumping Model of International Trade." Journal of International Economics 15 (1983): 313-321. Krugman, Paul R. "Scale Economies, Product Differentiation, and the Pattern of Trade." American Economic Review 70 (1980): 950-959. Recommended readings
Brander, James A. "Intra-Industry Trade in Identical Commodities." Journal of International Economics 11, no. 1 (1981): 1-14. Ethier, Wilfred J. "Decreasing Costs in International Trade and Frank Graham's Argument for Protection." Econometrica 50, no. 5 (1982): 1243-1268. Helpman, Elhanan. "International Trade in the Presence of Produce Dierentiation, Economies of Scale and Monopolistic Competition: A Chamberlin-Heckscher-Ohlin Approach." Journal of International Economics 11, no. 3 (1981): 305-340. Krugman, Paul R. "Increasing Returns, Monopolistic Competition, and International Trade." Journal of International Economics 9 (1979): 469-479. ———. "Intraindustry Specialization and the Gains from Trade." Journal of Political Economy 89, no. 5 (1981): 959-973. ———. "History versus Expectations." Quarterly Journal of Economics 106, no. 2 (1991): 651-67. |
| VII. Imperfect competition: Empirics | |
| 11 | Textbook treatment Feenstra, 2003, chapter 5. Grossman and Rogoff, 1995, chapter 26 (by Leamer and Levinsohn). Required readings Helpman, Elhanan. "Imperfect Competition and International Trade: Evidence from Fourteen Industrial Countries." Journal of the Japanese and International Economies 1, no. 1 (1987): 62-81. Hummels, D., and J. Levinsohn. "Monopolistic Competition and International Trade: Reconsidering the Evidence." Quarterly Journal of Economics 110, no. 3 (1995): 799-836. Romalis, John. "Factor Proportions and the Structure of Commodity Trade." American Economic Review 94, no. 1 (2004): 67-97. Recommended readings Anderson, James E., and Eric van Wincoop. "Gravity with Gravitas: A Solution to the Border Puzzle." American Economic Review 93, no. 1 (2003): 170-192. Antweiler, Werner, and Daniel Trefler. "Increasing Returns and All That: A View from Trade." American Economic Review 92, no. 1 (2002): 93-119. Broda, Christian, and David Weinstein. "Globalization and the Gains from Variety." Quarterly Journal of Economics 121, no. 2 (2006): 541-585. Cieślik, Andrzej. "Intraindustry Trade and Relative Factor Endowments." Review of International Economics 13, no. 5 (2005): 904-926. Debaere, Peter. "Monopolistic Competition and Trade, Revisited: Testing the Model without Testing for Gravity." Journal of International Economics 66, no. 1 (2005): 249-266. Evenett, S. J., and W. Keller. "On Theories Explaining the Success of the Gravity Equation." Journal of Political Economy 110, no. 2 (2002): 281-316. Hummels, David, and Peter Klenow. "The Variety and Quality of a Nation's Exports." American Economic Review 95 (2005): 704-723. |
| VIII. Firm heterogeneity | |
| 12-13 | Required readings Bernard, Andrew B., Jonathan Eaton, J. B. Jensen, and Samuel Kortum. "Plants and Productivity in International Trade." American Economic Review 93, no. 4 (2003): 1268-1290. Helpman, Elhanan, Marc J. Melitz, and Yona Rubinstein. "Estimating Trade Flows: Trading Partners and Trading Volumes." National Bureau of Economic Research Working Paper No. 12927 (February 2007). Melitz, Marc J. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity." Econometrica 71, no. 6 (2003): 1695-1725. Melitz, Marc, and Gianmarco Ottaviano. "Market Size, Trade and Productivity." National Bureau of Economic Research Working Paper No. 11393 (June 2005). Recommended readings Bernard, Andrew B., Stephen Redding, and Peter K. Schott. "Comparative Advantage and Heterogeneous Firms." Review of Economic Studies no. 1 (2007): 31-66. Chaney, Thomas. "Distorted Gravity: Heterogeneous Firms, Market Structure, and the Geography of International Trade." Mimeo University of Chicago (May 2007). Eaton, Jonathan, Samuel Kortum, and Francis Kramarz. "An Anatomy of International Trade: Evidence from French Firms." Mimeo University of Minnesota (October 2005). Pavcnik, Nina. "Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants." The Review of Economic Studies 69 (2002): 245-76.
Yeaple, Stephen. "A Simple Model of Firm Heterogeneity, International Trade, and Wages." Journal of International Economics 65, no. 1 (2005): 1-20. |
| IX. Multinational firms | |
| 14 | Textbook treatment Helpman and Krugman, 1985, chapters 12 and 13.
Required readings Brainard, S. Lael. "An Empirical Assessment of the Proximity-Concentration Trade-off Between Multinational Sales and Trade." American Economic Review 87, no. 4 (1997): 520-544. Helpman, Elhanan. "A Simple Theory of International Trade with Multinational Corporations." Journal of Political Economy 92, no. 3 (1984): 451-471. Helpman, Elhanan, Marc J. Melitz, and Stephen R. Yeaple. "Exports versus FDI with Heterogeneous Firms." American Economic Review 94, no. 1 (2004): 300-316. Recommended readings Markusen, James R. "The Boundaries of Multinational Enterprises and the Theory of International Trade." Journal of Economic Perspectives 9, no. 2 (1995): 169-189. Markusen, James R., and Anthony J. Venables. "The Theory of Endowment, Intra-industry and Multi-national Trade." Journal of International Economics, 52 (2000): 209-234. Yeaple, Stephen. "The Role of Skill Endowments in the Structure of U. S. Outward FDI." Review of Economics and Statistics 85, no. 3 (August 2003): 726-734. Yi, Kei-Mu. "Can Vertical Specialization Explain the Growth of World Trade?" Journal of Political Economy 111, no. 1 (2003): 52-102. |
| X. International organization of production | |
| 15-16 | Required readings Grossman, G.M. and Helpman, E. "Integration vs. Outsourcing in Industry Equilibrium." Quarterly Journal of Economics 117, no. 1 (2002): 85-120. Antràs, Pol. "Firms, Contracts, and Trade Structure." Quarterly Journal of Economics 118, no. 4 (2003): 1375-1418. Antràs, Pol, and Elhanan Helpman. "Global Sourcing." Journal of Political Economy 112, no. 3 (2004): 552-580. Recommended readings Antràs, Pol. "Incomplete Contracts and the Product Cycle." American Economic Review 95, no. 4 (2005): 1054-1073. Ethier, Wilfred J. "The Multinational Firm." Quarterly Journal of Economics 101, no. 4 (1986): 805-833. Feenstra, Robert C. "Integration of Trade and Disintegration of Production in the Global Economy." Journal of Economic Perspectives 12, no. 4 (1998): 31-50. Feenstra, Robert C., and Gordon Hanson. "Ownership and Control in Outsourcing to China: Estimating the Property-Rights Theory of the Firm." Quarterly Journal of Economics 120, no. 2 (2005): 729-761. Grossman, G. M. and Helpman, E. "Outsourcing in a Global Economy." Review of Economic Studies 72, no. 1 (2005): 135-159.
Helpman, Elhanan. "Trade, FDI, and the Organization of Firms." Journal of Economic Literature 44 (2006): 589-630. McLaren, John. "Globalization and Vertical Structure." American Economic Review 90, no. 5 (2000): 1239-1254. Tomiura, Eiichi. "Foreign Outsourcing, Exporting, and FDI: A Productivity Comparison at the Firm Level." Journal of International Economics 72, no. 1 (2007): 113-127. Yeaple, Stephen R. "Offshoring, Foreign Direct Investment, and the Structure of U.S. International Trade." Journal of the European Economic Association 4, nos. 2-3 (2006): 602-611. |
| XI. Dynamics of international trade | |
| 17-19 | Textbook treatment Feenstra, 2003, chapter 10. Grossman and Helpman, 1991, chapters 3, 4, 7, 8, and 9. Grossman and Rogoff, 1995, chapter 25 (by Grossman and Helpman). Jones and Kenen, 1984, chapter 6 (by Smith). Required readings Acemoglu, Daron, and Jaume Ventura. "The World Income Distribution." Quarterly Journal of Economics 117, no. 2 (2002): 659-694. Antràs, Pol. "Incomplete Contracts and the Product Cycle." American Economic Review 95, no. 4 (2005): 1054-1073. Krugman, Paul R. "A Model of Innovation, Technology Transfer, and the World Distribution of Income." Journal of Political Economy 87, no. 2 (1979): 253-266. Ventura, Jaume. Growth and Interdependence." Quarterly Journal of Economics 111 (1997): 57-84. Young, Alwyn. "Learning-by-Doing and Dynamic Effects on International Trade." Quarterly Journal of Economics 106 (1991): 396-406. Recommended readings Brezis, Elise S., Paul R. Krugman, and Daniel Tsiddon. "Leapfrogging in International Competition: A Theory of Cycles in National Technological Leadership." American Economic Review 83, no. 5 (1993): 1211-1219. Coe, David, and Elhanan Helpman. "International R&D Spillovers." European Economic Review 39, no. 5 (1995): 859-887. Frankel, Jeffrey A., and David Romer. "Does Trade Cause Growth?" American Economic Review 89, no. 3 (1999): 379-399. Grossman, Gene M., and Elhanan Helpman. "Endogenous Product Cycles." Economic Journal 101 (1991): 1214-29. Grossman, Gene M., and Edwin Lai. "International Protection of Intellectual Property." American Economic Review 94, no. 5 (2004): 1635-1653. Krugman, Paul R. "The Narrow Moving Band, the Dutch Disease, and the Competitive Consequences of Mrs Thatcher: Notes on Trade in the Presence of Dynamic Scale Economies." Journal of Development Economics 27 (1987): 41-55. Matsuyama, Kiminori. "Agricultural Productivity, Comparative Advantage, and Economic Growth." Journal of Economic Theory 58 (1992): 317-334.
Rivera-Batiz, L., and P. Romer. "Economic Integration and Endogenous Growth." Quarterly Journal of Economics 106, no. 2 (1991): 531-55.
Vernon, Raymond. "International Investment and International Trade in the Product Cycle." Quarterly Journal of Economics 80, no. 2 (1966): 190-207. |
| XII. Trade policy | |
| 20-22 | Textbook treatment Feenstra, 2003, chapters 6 through 9. Dixit and Norman, chapter 6. Grossman and Rogoff, 1995, chapters 27 (by Brander) and 28 (by Rodrik). Jones and Kenen, 1984, chapters 2 (by Corden) and 12 (by Baldwin). Required readings Bagwell, K., and R. W. Staiger. "An Economic Theory of GATT." American Economic Review 89, no. 1 (1999): 215-248.
Brander, James, and Barbara Spencer. "Export Subsidies and International Market Share Rivalry." Journal of International Economics 18 (1985): 83-100.
Goldberg, Pinelopi K., and Giovanni Maggi. "Protection for Sale: An Empirical Investigation." American Economic Review 89, no. 5 (1999): 1135-1155. Grossman, Gene M., and Helpman, Elhanan. "Protection for Sale." American Economic Review 84, no. 4 (1994): 833-850.
Mayer, Wolfgang. "Endogenous Tariff Formation." American Economic Review 74, no. 5 (1984): 970-985. Recommended readings Aghion, Philippe, Pol Antràs, and Elhanan Helpman. "Negotiating Free Trade." Journal of International Economics 73, no. 1 (September 2007): 1-30.
Eaton, Jonathan, and Gene M. Grossman. "Optimal Trade and Industrial Policy under Oligopoly." Quarterly Journal of Economics 101, no. 2 (1985): 383-406. Grossman, Gene M., and Elhanan Helpman. "Trade Wars and Trade Talks." Journal of Political Economy 103, no. 4 (1995): 675-708. ———. "The Politics of Free Trade Agreements." American Economic Review 85, no. 4 (1995): 667-690.
Johnson, Harry G. "Optimum Tariffs and Retaliation." Review of Economic Studies 21, no. 2 (1953): 142-153. Kemp, M., and H. Wan. "An Elementary Proposition Concerning the Formation of Customs Unions." Journal of International Economics 6, no. 1 (1976): 95-97. Krishna, Kala. "Trade Restrictions as Facilitating Practices." Journal of International Economics 26 (1989): 251-270. Lerner, Abba P. "The Symmetry between Import and Export Taxes." Economica 3 (1936): 306-313. Maggi, Giovanni, and Andrés Rodríguez-Clare. "The Value of Trade Agreements in the Presence of Political Pressures." Journal of Political Economy 106, no. 3 (1998): 574-601. |
Table of Contents
Study Materials
Readings
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There are no required textbooks. The reading list refers to the following books, which are very much worth buying, but will be on reserve at the library:
Dixit, Avinash, and Victor Norman. Theory of International Trade: A Dual, General Equilibrium Approach. Cambridge, UK: Cambridge University Press, 1980. ISBN: 9780521234818.
Feenstra, Robert. Advanced International Trade: Theory and Evidence. Princeton, NJ: Princeton University Press, 2003. ISBN: 9780691114101.
Grossman, Gene, and Elhanan Helpman. Innovation and Growth in the Global Economy. Cambridge, MA: MIT Press, 1991. ISBN: 9780262071369.
Grossman, Gene, and Kenneth Rogoff. Handbook of International Economics. Vol. 3. New York, NY: Elsevier, 1995. ISBN: 9780444815477.
Helpman, Elhanan, and Paul R. Krugman. Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy. Cambridge, MA: MIT Press, 1987. ISBN: 9780262580878.
Jones, Ronald, and Peter Kenen. Handbook of International Economics. Vol. 1. New York, NY: Elsevier, 1984. ISBN: 9780444867926.
Additional units, time-permitting, include Trade and Institutions, Sorting in Trade and Foreign Direct Investment (FDI), and Trade and Geography.
XIII. Trade and Institutions
Required Readings
Nunn, Nathan. "Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade." Quarterly Journal of Economics 122, no. 2 (2007): 569-600.
Acemoglu, Daron, Pol Antràs, and Elhanan Helpman. "Contracts and Technology Adoption." American Economic Review 97, no. 3 (June 2007): 916-943.
Recommended Readings
Costinot, Arnaud. "Imperfect Contract Enforcement, Firm Size and the Pattern of Trade." Mimeo, Princeton University, 2004.
Cuñat, Alejandro, and Marc Melitz. "Volatility, Labor Market Flexibility, and the Pattern of Comparative Advantage." National Bureau of Economic Research Working Paper No. 13062 (2007).
Levchenko, Andrei. "Institutional Quality and International Trade." Review of Economic Studies 74, no. 3 (July 2007): 791-819.
Manova, Kalina. "Credit Constraints, Heterogeneous Firms and International Trade." Mimeo, Harvard University, 2006.
Matsuyama, Kiminori. "Credit Market Imperfection and Patterns of International Trade and Capital Flows." Journal of the European Economic Association 3, no. 2-3 (April/May 2005): 714-723.
XIV. Sorting in Trade and Foreign Direct Investment (FDI)
Required Readings
Grossman, Gene M., and Giovanni Maggi. "Diversity and Trade." American Economic Review 90, no. 5 (2000): 1255-1275.
Kremer, Michael, and Eric Maskin. "Globalization and Inequality." Mimeo, 2003.
Antràs, Pol, Luis Garicano, and Esteban Rossi-Hansberg. "Offshoring in a Knowledge Economy." Quarterly Journal of Economics 121, no. 1 (2006): 31-77.
Recommended Readings
Garicano, Luis, and Esteban Rossi-Hansberg. "Organization and Inequality in a Knowledge Economy." Quarterly Journal of Economics 121, no. 4 (2006): 1383-1435.
Ohnsorge, Franziska, and Daniel Trefler. "Sorting It Out: International Trade and Protection With Heterogeneous Workers." National Bureau of Economic Research Working Paper No. 10959 (2004).
XV. Trade and Geography
Required Readings
Anderson, James E., and Eric van Wincoop. "Gravity with Gravitas: A Solution to the Border Puzzle." American Economic Review 93, no. 1 (2003): 170-192.
Krugman, Paul R. "Increasing Returns and Economic Geography." Journal of Political Economy 99, no. 3 (1991): 483-499.
Recommended Readings
Davis, Donald R., and David Weinstein. "Market Access, Economic Geography, and Comparative Advantage: An Empirical Assessment." Journal of International Economics 59, no. 1 (2003): 1-23.
Engel, Charles, and John H. Rogers. "How Wide Is the Border?" American Economic Review 86, no. 5 (1996): 1112-1125.
Krugman, Paul, and Anthony Venables. "Globalization and the Inequality of Nations." Quarterly Journal of Economics 110, no. 4 (1995): 857-880.
McCallum, John. "National borders Matter: Canada-U. S. Regional Trade Patterns." American Economic Review 85, no. 3 (1995): 615-623.
Rossi-Hansberg, Esteban. "A Spatial Theory of Trade." American Economic Review 95, no. 5 (2005): 1464-1491.