Summer 2021
Quantitative G.E. Analysis

お知らせ

受講希望の方はこちらから氏名・連絡先を登録してください。Allen and Arkolakisのレクチャーノートを事前にダウンロードし、チャプター1・2を通読しておくことをおすすめします（15ページ程度）。また数値解析ソフトをインストールしたPCを持参してください（詳細は下記参照のこと）。講義は板書で行います。ご質問は鈴木健介(kxs974@psu.edu)まで。

Notice

Please register your contact information here. Download Allen and Arkolakis' lecture note and read through Chp 1 and 2 (aprox 15 pages) before joining the first class. Bring a laptop computer with a numerical analysis software installed (see below for details). I will use a whiteboard for the presentation. Contact Ken Suzuki at kxs974@psu.edu for any further questions.

Course Title:

Mini-Lecture on Quantitative General Equilibrium Analysis: Theory and Computational Application

Short description:

This is a graduate-level mini-lecture on quantitative general equilibrium (G.E.) analysis. Over the course of last decades, there has been an increasing number of studies in quantitative G.E. analysis in the field of international trade, spatial economics, development economics, etc. In this lecture series, we will study the basics of quantitative G.E. analysis with primary focus on the application to the international trade. In particular, we will study the theory and computational application of the Ricardian model of international trade a la Eaton and Kortum (2002, Ecta). Students are to work on numerical analysis computer software (e.g., Matlab) to solve an equilibrium of the model by themselves. We will also cover the applications to the spatial economics and labor economics. This lecture is taught primarily in English with supplemental explanations in Japanese if needed.

This lecture series is organized by Professor Yasuhiro Doi as an Economics Department Seminar.

Instructor:

Kensuke Suzuki (The Pennsylvania State University and Nagoya University)
Office hours: after the class or by appointment (kxs974@psu.edu)

Class Schedule:

1. July 1, Thu 2:45 - 4:15 pm (4th period) @ ECON Seminar room 14 Zoom link

• Introduction

• Armington Model

2. July 5, Mon, 4:30 - 6:00 pm (5th period) @ ECON Seminar Room 11 Zoom link

   • Armington Model (equilibrium)

   • EK model (stochastic formulation of efficiency)

   • Matlab (solving the system of equations by iteration)

3. July 7, Wed, 1:00 - 2:30 pm (3rd period) @ ECON Seminar Room 14 Zoom link

   • EK model (bilateral trade share and equilibrium)

   • Matlab (solving the system of equations)

4. July 8, Thu, 2:45 - 4:15 pm (4th period) @ ECON Seminar room 14 Zoom link

   • Exact hat algebra a la Deckle, Eaton, and Kortum (2008)

   • Matlab (solving the EK model)

5. July 12, Mon, 4:30 - 6:00 pm (5th period) @ ECON Seminar Room 11 Zoom link

   • Applications to spatial economics (Redding, 2016) and Roy's assignment framework (Burstein et al., 2020)

   • Matlab exercise (comparative statics)

Course Outline:

1. Introduction to the quantitative G.E. analysis

2. Armington Model (Armington, 1969): CES demand and gravity (AA 3.1-3.3)

3. Eaton-Kortum Model (Eaton and Kortum, 2002)

   1. Probabilistic formulation of production technology (AA4.1-4.2)

   2. General equilibrium (AA4.3)

   3. Numerical solution to an equilibrium and comparative statics exercises

   4. Exact hat-algebra a la Deckle, Eaton and Kortum (2008) (AA6.4)

4. Applications to spatial economics and labor economics

   1. Spatial application: Redding (2016)

   2. Application to labor economics: Burstein et al. (2019; 2020)

* AA refers Lecture note by Allen and Arkolakis (see below)

Prerequisite:

• Students from any fields are welcome

• Intermediate microeconomics and econometrics (preferably graduate-level microeconomics)

• Laptop computer with Matlab or Octave installed

Lecture slide

• Shared by email

Homework exercise:

• Homework (Introduction to matlab) PS AK

• Homework (EK model) PS

Computational Software:

Bring a laptop computer to which a numeric analysis software is installed.

• Matlab (recommended): paid software; student discount (JPY 4,990) and 30-day free trial available, or

• Octave: free software that can run m-file Matlab codes.

Matlab is recommended software for this workshop. Student license is permanent and priced at 4,990 and 30-day free trial is also available. If you have a good command of other programing languages (Julia, Python, etc) to work on numerical analysis, feel free to use those . Statistical software (Stata, Eviews, etc) can not be substitute. In-class explanation and sample code will be written in Matlab language.

References:

Lecture note:

• Allen and Arkolakis "ELEMENTS OF ADVANCED INTERNATIONAL TRADE" (Available at the author's website)

Papers

• Armington (1969)

• Burstein et al. (2019; 2020)

• Caliendo and Parro (2015)

• Eaton and Kortum (2002)

• Redding (2016)