Advanced International Trade
Forgeschrittene Handelspolitik

Course Overview

Lecturer: Univ Prof Dr Joseph Francois.

This course covers the theory of international trade at a level appropriate for masters (MA) students. Emphasis is on both basic theory and application. The goal is to gain a working knowledge of standard analytical tools, and a familiarity with current research topics in trade and the real side of international economic policy. This includes dual general equilibrium theory, commercial policy and regional integration, theories of industrial location and agglomeration, trade and the distribution of income, and trade and accumulation/growth. It also includes the recent empirical literature on testing this body of theory (policy determination, trade and FDI flows, firm-level evidence on productivity and openness, openness and inequality).

Readings -- posted on this page -- will come from:

J.N. Bhagwati, A. Panagariya, and T.N. Srinivasan, Lectures on International Trade, second edition, MIT Press, 1998. (Required sections are in the electronic reader. They are designated as BPS in the reading list).

A Dixit and V. Norman, Theory of International Trade, Cambridge University Press: Cambridge, 1980. (Required sections are in the reader. They are designated as DN in the electronic reading list).

R.C. Feenstra, Advanced International Trade: Theory and Evidence, Princeton University Press: Princeton, 2003, ISBN: 0-691-11410-2. (Required sections are in the electronic reader. They are designated as DN in the reading list)

J.R. Markusen, J.R. Melvin, W.H. Kaempfer, and K.E. Maskus 1995, International Trade: Theory and Evidence, McGraw-Hill.

I. Preliminaries: Dual Representations of General Equilibrium

1. The Expenditure and GDP Function
2. Patterns of Trade
3. Gains From Trade

A Dixit and V. Norman, Theory of International Trade, Cambridge University Press: Cambridge, 1980/1986: CHAPTER 2.
A Dixit and V. Norman, Theory of International Trade, Cambridge University Press: Cambridge, 1980/1986: CHAPTER 3.
J.R. Markusen, J.R. Melvin, W.H. Kaempfer, and K.E. Maskus 1995, International Trade: Theory and Evidence, McGraw-Hill, CHAPT 4.
J.R. Markusen, J.R. Melvin, W.H. Kaempfer, and K.E. Maskus 1995, International Trade: Theory and Evidence, McGraw-Hill., CHAPT 5.
LECTURE NOTES

II. Perfectly Competitive Trade Models

1. The Ricardian Model
2. The Ricardo-Vine Model
3. The Heckscher-Ohlin Model
4. The de Melo-Robinson Model
5. External Scale Economies

III. Imperfectly Competitive Trade Models

1. Oligopoly
2. Monopolistic Competition
3. Monoposony

IV. International Trade Policy

1. Efficiency and Optimal Policy
2. Equity and Trade
3. Endogenous Policy Formation
4. Regionalism

V. International Competition Policy

1. Merger Policy
2. Regulating Anticompetitive Behaviour
3. Trade and Monopsony

VI. FDI & Multinational Enterprises

VII. Migration

1. Economic Migration
2. Migration and Wages
3. Migration and Social Capital

VIII. Dynamics and Growth

1. Capital Accumulation in Steady State
2. Transition Dynamics
3. Innovation and Endogenous Growth

IX. Empirics

1. Directions of Trade and Gravity Models
2. Trade and Functional Income Distribution
3. Testing Theories of Policy Formation