Bachelor
2024/2025
International Trade
Type:
Elective course (HSE/NES Programme in Economics)
Area of studies:
Economics
Delivered by:
Department of Theoretical Economics
Where:
Faculty of Economic Sciences
When:
4 year, 1, 2 module
Mode of studies:
offline
Open to:
students of all HSE University campuses
Instructors:
Alexander Tarasov
Language:
English
ECTS credits:
6
Course Syllabus
Abstract
The purpose of this course is to introduce students into the classical and modern theories of international trade. In particular, I am going to address three main questions: (i) What are the patterns of trade we observe in the real world (who sells what to whom?) and how can we explain them? (ii) If international trade is welfare improving, can we say something about the magnitude of these gains from trade? (iii) What is the effect of different trade policies on country’s welfare? The course will be divided into five parts. In the first part, we will study the classical trade theories based on the principle of a comparative advantage, which is originated to Ricardo. In the second part, we will talk about the, so called, new trade theory that was developed by Paul Krugman (he won a Nobel Prize for this theory) and, then, Elhanan Helpman among others. The third part will be devoted to the analysis of various instruments of trade policy under different assumptions for the market structure. We will try to understand which policy is beneficial for country’s welfare and in which cases. In the fourth part, we will try to understand the magnitude of the welfare gains. This part of the course will be based on recent seminal trade papers. Specifically, we will focus on the quantitative macro approach to understanding the size of the gains from trade. In addition, we consider a study based on a trade natural experiment. There will be also a part of the course that you will study on your own using the online course on International Trade (which is specified later). To complement the lectures, throughout the course, I will be assigning supplementary readings that will present important findings on the topics covered by the lectures. The only pre-requisite for this course is intermediate level microeconomics.
Learning Objectives
- to prepare students for future careers in policy and research that require understanding of the global economic processes
- to develop a critical understanding of economic theory, empirical evidence and key phenomena relevant to the role of international trade in a globalized world
- to introduce the key models economists use to think about international trade and build understanding through math, graphs and economic intuition
- to confront the discussed models with empirical data and anecdotal evidence
Expected Learning Outcomes
- be familiar with the logic and intuition behind the main trade models that explain trade between countries that differ in technology or factor endowments
- be familiar with the logic and intuition behind the Krugman model that explains trade between similar countries
- develop critical thinking about economic matters related to international trade policies
- understanding different approaches used to measure the gains from trade
- understanding the implications of different trade policies for economic well-being of different agents: consumers, firms, the government; and the whole economy
Course Contents
- Comparative Advantage and Trade
- Increasing Returns To Scale and Trade
- The Magnitude of the Gains from Trade
- International Trade Policy Under Perfect Competition
- Different Consequences of International Trade
Assessment Elements
- HomeworksThere will be three homeworks.
- Class participation and activity
- Midterm
- Final test
Interim Assessment
- 2024/2025 2nd module0.05 * Class participation and activity + 0.05 * Class participation and activity + 0.49 * Final test + 0.04 * Homeworks + 0.08 * Homeworks + 0.29 * Midterm
Bibliography
Recommended Core Bibliography
- 9780132146654 - Krugman, Paul R.; Obstfeld, Maurice; Melitz, Marc J. - International Economics : Theory and Policy, Global Edition - 2015 - Pearson - https://search.ebscohost.com/login.aspx?direct=true&db=nlebk&AN=1419045 - nlebk - 1419045
- Advanced international trade : theory and evidence, Feenstra, R. C., 2016
- Feenstra, R. C. (2004). Advanced International Trade : Theory and Evidence. Princeton, N.J.: Princeton University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsebk&AN=295542
- International economics : theory & policy, Krugman, P. R., Obstfeld, M., 2009
- Robert C. Feenstra. (2015). Advanced International Trade: Theory and Evidence Second Edition. Princeton University Press. Retrieved from http://search.ebscohost.com/login.aspx?direct=true&site=eds-live&db=edsrep&AN=edsrep.b.pup.pbooks.10615
Recommended Additional Bibliography
- International economics : theory & policy, Krugman, P. R., 2012
- International economics : theory and policy, Krugman, P. R., 1997
- International economics : theory and policy, Krugman, P. R., 2015