Master 2 APE
 
International Trade
 
Maria Bas, Lionel Fontagné, Mathieu Parenti
​

 
Detailed syllabus  
  
1 Higher dimensions of the standard theory
  • GDP function, duality
  • World Integrated equilibrium
  • Dimensionality issues

Suggested readings:
Helpman H. & Krugman P., Market structure and international trade, (1985, MIT press)
Feenstra R. (2005), Advanced international trade, theory and evidence (2004, Princeton University Press)
 
2 Vertical specialization 
  • Trade in value added
  • Models of offshoring
  • Trading tasks

Suggested readings:
Johnson, R. C., & Noguera, G. (2012). Accounting for intermediates: Production sharing and trade in value added. Journal of international Economics, 86(2), 224-236.
Koopman, R., Wang, Z., & Wei, S. J. (2014). Tracing value-added and double counting in gross exports. American Economic Review, 104(2), 459-94. 
Grossman, G. M., & Rossi-Hansberg, E. (2008). Trading tasks: A simple theory of offshoring. American Economic Review, 98(5), 1978-97. 

3 Structural gravity with homogenous firms
  • Monopolistic competition with homogenous firms
  • Intra-and industry trade
  • Structural gravity
 
Suggested readings:
Head, K., & Mayer, T. (2014). Gravity equations: Workhorse, toolkit, and cookbook. In Handbook of international economics (Vol. 4, pp. 131-195). Elsevier. 
Helpman H., & Krugman P., Market structure and international trade, (1985, MIT press)
 
4 From micro to macro: firm heterogeneity in international trade 
  • Firm-level heterogeneity: facts
  • The Melitz model
 
Suggested reading:
Melitz, Marc J., & Stephen J. Redding. Heterogeneous firms and trade. Handbook of international economics. Vol. 4. Elsevier, 2014. 1-54.
 
 
5 Macro-trade: gravity and the gains from trade 
  • Structural gravity: extensions
  • The ACR formula
  • Quantifying the trade-induced impact of Brexit
 
Suggested readings:
Head, K., & Mayer, T. (2014). Gravity equations: Workhorse, toolkit, and cookbook. In Handbook of international economics (Vol. 4, pp. 131-195). Elsevier. 
Arkolakis, Costas, Arnaud Costinot, & Andrés Rodríguez-Clare(2012). New trade models, same old gains? American Economic Review 102.1: 94-130.
Dhingra, Swati, et al. (2017). The costs and benefits of leaving the EU: trade effects. Economic Policy 32.92 (2017): 651-705.
 
6 Micro-Trade: Mark-ups, pass-through and multi-product firms. 
  • Variable mark-ups and the pro-competitive impact of international trade under monopolistic competition
  • Variable mark-ups and misallocation
  • Firm-level pass-through rate and multi-product firms
 
 Suggested readings:
Zhelobodko, E., Kokovin, S., Parenti, M., & Thisse, J. F. (2012). Monopolistic competition: Beyond the constant elasticity of substitution. Econometrica, 80(6), 2765-2784. Dhingra, Swati, and John Morrow. (2019). Monopolistic competition and optimum product diversity under firm heterogeneity." Journal of Political Economy 127.1 (2019): 196-232.
Mayer, T. Melitz, M. and G. Ottaviano  (2020). Product Mix and Firm Productivity Responses to Trade Competition" Review of Economics and Statistics
 
7 Firms in international trade. Empirical facts 
  • Micro-determinants of international trade
  • The characteristics of internationalized firms
  • Firm heterogeneity: Exporter & importer premia Multiproduct firms: exporter and importer
  • Main Datasets and different sources Bilateral trade data: gravity variables
  • Macro data Industry-level data Firm level data

Suggested readings:
Bernard, Andrew B., J. Bradford Jensen, Stephen J. Redding, & Peter K. Schott. 2007. Firms in International Trade. Journal of Economic Perspectives, 21(3): 105-130.
Bernard, Andrew B., & J. Bradford Jensen, 1999, Exceptional Exporter Performance: cause, effect, or both? Journal of International Economics, 47(1): 125.
Goldberg, P., A. Khandelwal, N. Pavnick & P. Topalova Multi-product Firms and Product Turnover in the Developing World: Evidence from India, Review of Economics and Statistics, 92 (4), pp. 1042-1049.

 8 Micro-level Trade Elasticities 
  • Microfoundations of the gravity model
  • The elasticity of the extensive and intensive margin of trade
  • Integrating firm heterogeneity as a determinant of aggregate trade elasticities
  • Estimating trade elasticities with micro-data
  • Main issues: estimation of firm level elasticity
  • Demand and Supply determinants of aggregate trade elasticity
 
Suggested readings:
Chaney (2008), Distorted Gravity: The Intensive and Extensive Margins of International Trade?, American Economic Review 2008, 98:4, 1707-1721
Bas, M, T. Mayer & M. Thoenig, (2017), From micro to macro: Demand and supply-side determinants of trade elasticity?, Journal of International Economics, 108: 1-19 (lead article), 2017.

9 Trade, Firm Productivity and Technology Adoption 
  • The effects of trade liberalization on firm performance
  • Trade reforms and firm productivity
  • Disentangling the effect of output and input tariffs
 
Suggested reading:
Amiti, M. & Konings, J. Trade Liberalization, Intermediate Inputs, and Productivity. American Economic Review, December vol. 97(05) December 2007, pp.1611-1638.

10 Trade, Firm Productivity and Technology Adoption 
  • The effects of trade liberalization on firm performance
  • Trade Liberalization and Product Innovation
  • Imported inputs and domestic product growth in India
  • Input trade liberalization and foreign technology
 
Suggested reading:
Goldberg, P., Khandelwal, A, Pavcnik, N. and P. Topalova Imported Intermediate Inputs and Domestic Product Growth: Evidence from India, Quarterly Journal of Economics 125(4) 2010, pp. 1727-1767.
 
11 The role of product quality on heterogeneous firms’ models 
  • Prices and quality
  • Demand for quality products; Quality as a demand shifter (CES), Endogenous supply of quality;
  • The role of product quality on heterogeneous firms’ models
  • Different measures of product quality; Input-trade liberalization and quality upgrading.
 
Suggested readings:
Bas, M & Strauss-Kahn, V., 2015, Input-Trade Liberalization, Export Prices and Quality Upgrading, Journal of International Economics, Vol. 95 (2), p.p. 250-262.
Khandelwal, A., Schott, P., & Wei, S., 2013. Trade liberalization and embedded institutional reform: evidence from Chinese exporters. American Economic Review. 103 (6), 2169-2195.

12 Trade liberalization and labor markets 
  • Trade Liberalization and Labor Markets
  • Trade Liberalization and Firm Wages
  • Tariff cuts, firms’ trade orientation and wage inequality
  • Trade liberalization, Quality and Skilled upgrading
 
Suggested readings:
Amiti, M. & Davis, D. (2012). Trade, Firms, and Wages: Theory and Evidence, Review of Economic Studies, vol. 79(1) 1 -36.

 
13 Trade, Prices, Mark-ups, Pass-through 
  • From Micro to Macro: Micro-level evidence to understand Macro-economic puzzle
  • Imported inputs and tariffs Pass-through
  • Trade liberalization and Markups Tariffs pass-through on prices
 
Suggested reading:
De Loecker, J., Goldberg, P. K., Khandelwal, A. K., & Pavcnik, N. (2016). Prices, markups, and trade reform. Econometrica, 84(2), 445-510.
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