Undergraduate Trade

Syllabus

Lecture Notes

• Week #1: Preliminaries (handout) (presentation)

• Week #2: The Ricardian model (handout) (presentation)

• Week #3: Modern comparative advantage (handout) (presentation)

• Week #4: Testing the Ricardian model (handout) (presentation)

• Weeks #5 & #6: The specific factors model (handout) (presentation)

• Weeks #6 & #7: The Heckscher-Ohlin model (handout) (presentation)

• Weeks #7 & #8 (and #10): Firms and Trade (handout) (presentation)

• Week #9: Trade Models and Data (handout) (presentation)

Problem Sets

• Problem Set #1 (solution)

• Problem Set #2 (solution)

• Problem Set #3 (solution)

• Problem Set #4 (solution)

• Problem Set #5 (solution) (Downloads: Econ39_Allen_PS5.m Econ39_Allen_PS5.mat)

Practice Problems

• Ricardian Model practice problem (solution)

• Midterm #1 practice problems (solution)

• Specific Factors practice problems (solution)

• Heckscher-Ohlin practice problems (solution)

Exams

• Midterm #1 (solution)

• Midterm #2 (solution)

• Final Exam

Readings

(*) Denotes a more technical piece. Have a look, but don't sweat the details.

• Week #1 (Preliminaries): KOM Chapter 1.

• Week #2 (The Ricardian Model): KOM Chapter 3.

• Week #3 (Modern Comparative Advantage):

  • R. Dornbusch, S. Fischer and P. A. Samuelson. “Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods.” The American Economic Review, 1977, vol. 67 issue 5, pp. 823-839.

  • J. Eaton and S. Kortum. “Putting Ricardo to Work.” The Journal of Economic Perspectives, 2012, Vol. 26, No. 2 (Spring 2012), pp. 65-89.

  • (*) J. Eaton and S. Kortum. “Technology, Geography, and Trade.” Econometrica, Vol. 70, No. 5 (Sep., 2002), pp. 1741-1779.

• Week #4 (Testing Ricardo):

  • A. Costinot and D. Donaldson. “Ricardo’s Theory of Comparative Advantage: Old Idea, New Evidence” American Economic Review Papers and Proceedings, 2012, vol. 102, issue 3, pp. 453-458.

  • D. Bernhofen and J. C. Brown. "A Direct Test of the Theory of Comparative Advantage: The Case of Japan" Journal of Political Economy, Vol. 112, No. 1 (February 2004), pp. 48-67.

• Weeks #5&6 (Specific Factors): KOM Chapter 4.

• Weeks #6&7 (Heckscher-Ohlin): KOM Chapter 5.

• Weeks #7&8 (Firms and Trade): KOM Chapter 8.

  • A. Bernard, J. Jensen, S. Redding, and P. Schott. “Firms in International Trade.” The Journal of Economic Perspectives, Vol. 21, No. 3 (Summer, 2007), pp. 105-130.

  • M. Melitz and D. Trefler. “Gains from Trade when Firms Matter.” The Journal of Economic Perspectives, Vol. 26, No. 2 (Spring 2012), pp. 91-118.

• Weeks #9&10 (Trade Models and Data): KOM Chapter 2

  • Anderson and E. van Wincoop. “Trade Costs.” Journal of Economic Literature, Vol. 42, No. 3 (Sep., 2004), pp. 691-751.

  • (*) T. Allen and C. Arkolakis. “Trade and the Topography of the Spatial Economy.” Quarterly Journal of Economics, Vol 129, No. 3, pp. 1085-1140.

  • (*) A. Costinot and A. Rodriguez-Clare. “Trade Theory with Numbers: Quantifying the Consequences of Globalization.” Handbook of International Economics, 2014, vol. 4, chapter 4, Gita Gopinath, Elhanan Helpman, and Kenneth Rogoff editors.

  • (*) S. Redding and E. Rossi-Hansberg. “Quantitative Spatial Economics.” Annual Review of Economics, forthcoming 2017, NBER Working Paper, 22655.

Participation Quiz