International Trade 31E00500, Fall 2012

Hanna Pesola, VATT, hanna.pesola@vatt.fi (first half of the course) Katariina Nilsson Hakkala, Aalto & VATT (second half) Tue, Thurs 10-12, CH-126
https://noppa.aalto.fi/noppa/kurssi/31e00500

Reading list (Final!)

Main texts: Feenstra, R.C. (FRC) (2004) Advanced International Trade: Theory and Evidence, Princeton University Press Markusen J., J. Melvin, W. Kaempfer, and K. Maskus (MMKM) (1995) International Trade: Theory and Evidence, McGrawHill. The book is out of print but it can be downloaded from: http://spot.colorado.edu/~markusen/textbook.html. Barba-Navaretti G. and A. Venables (BNV) (2004) Multinational Firms in the World Economy, Princeton University Press

I Inter-industry Specialization, Comparative Advantage, and Gains from Trade

1. Demand, Supply, Competitive Equilibrium MMKM, 1-4. 2. Gains from Trade and Ricardian Model FRC 1 MMKM, 5-7. 3. Ricardian Model: Applications Dornbusch R., S. Fischer, and P. Samuelson (1977) Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods, American Economic Review, vol. 67, No. 5, 823-839. Eaton J. and S. Kortum (2002) Technology, Geography, and Trade, Econometrica, vol. 5, September, 1741-1779. Eaton J. and S. Kortum (2012) Putting Ricardo to Work, Journal of Economic Perspectives, vol. 26, No. 2, 65-90. Leamer, E. (2007) A Flat World, a Level Playing Field, a Small World After All, or None of the Above? A Review of Thomas L. Friedmans The World is Flat, Journal of Economic Literature, vol. XLV, March, 83-126. Samuelson, P. (2004) Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization, Journal of Economic Perspectives Volume 18, Number 3, Pages 135146., can be downloaded at the AaltoUSE library . Optional: Richard A. Brecher and Ehsan U. Choudhri (1982) Immiserizing Investment From Abroad: The Singer-Prebisch Thesis Reconsidered The Quarterly Journal of Economics, Vol. 97, No. 1, pp. 181-190. Matsuyama K. (2002) The Rise of Mass Consumption Societies Journal of Political Economy, Vol. 110, No. 5 (October 2002), pp. 1035-1070 4. Relative Factor Abundance: The Heckscher-Ohlin Model FRC 2-3 MMKM, 6, 8.

5. Applications and Ricardo-Viner -Model FRC 4 MMKM, 9. Davis D. (1996) Trade Liberalization and Income Distribution, NBER Working Paper No. 5693. Goldberg P. and N. Pavcnik (2007) Distributional Consequences of Globalization in Developing Countries, Journal of Economic Literature, Vol. 45, No. 1. Optional: Slaughter M. (2001) Trade liberalization and per capita income convergence: a difference-in-differences analysis, Journal of International Economics, vol. 55, 203228. Hanson G. and M. Slaughter (2002) Labor-market adjustment in open economies Evidence from US states, Journal of International Economics, vol. 57, 3-29 6. External Increasing Returns to Scale MMKM, 12.2. Deardorff A. Introduction to External Increasing Returns, course handout, Dept. of Economics, University of Michigan, http://wwwpersonal. umich.edu/~alandear/courses/441/handouts/EIRS.pdf.

II Intra-industry Specialization, Imperfect Competition and Trade

1. Imperfect Competition: Monopolistic Competition FRC 5 MMKM, 12.6. Krugman P. (1981) Intra-industry Specialization and the Gains from Trade, Journal of Political Economy, vol. 89, 959-973. Optional: Harrigan J. (2003) Specialization and the Volume of Trade: Do the Data Obey the Laws, Ch. 4 in E. Choi and J. Harrigan (eds.) Handbook of International Trade, Blackwell Publishing. 2. Imperfect Competition: Oligopolistic Competition MMKM, 11, 12.5.

III Trade Policy

1. Trade Policy: Tariffs, Quotas and Dumping FRC 7, 8 MMKM 10, 15-16., BW 8. 2. Trade Policy: Imperfect Competition MMKM, ch. 17. 3. Regional Agreements FRC 6 MMKM, ch. 18, 20

IV Multinational Firms and Foreign Direct Investment

1. Basics BNV, chs 1 and 2.

2. Horizontal and Vertical FDI BNV, chs 3 and 4. 3. Markets and MNCs BNV, ch. 5. Grossman, G.M. and Rossi-Hansberg, E (2006) The rise of offshoring its not Wine for Cloth Anymore downloaded at: http://www.princeton.edu/~erossi/RO.pdf Baldwin R. and F. Robert-Nicoud (2007) Offshoring: General Equilibrium Effects on Wages, production, and Trade, NBER Working Paper No. 12991, can be downloaded at the AaltoUSE weblibrary or at Baldwins homepage http://www.graduateinstitute.ch/ctei/home/ctei_people/baldwin/publications_globalisatio n.html. Baldwin Richard (2006) Globalization: the great unbundling(s), Valtioneuvoston kanslian julkaisuja, can be downloaded e.g. at Baldwins homepage: http://www.graduateinstitute.ch/ctei/home/ctei_people/baldwin/publications_globalisatio n.html Optional: Blinder A. and A. Krueger (2009) Alternative Measures of Offshorability: A Survey Approach, NBER Working Paper No. 15287, can be downloaded at the HSE weblibrary. Grossman, G.M. and Rossi-Hansberg, E. (2008) Trading Tasks: A Simple Theory of Offshoring The American Economic Review, Vol. 98, No. 5 pp. 1978-1997 4. Offshoring and labor markets
Goos, M, A.Manning , and A. Salomons (2009) "Job Polarization in Europe", 99:2, 5863. American Economic Review: Papers & Proceedings Goos, M, A.Manning , and A. Salomons (2010) "Explaining Job Polarization in Europe: The Roles of Technology, Globalization and Institutions", CEP Discussion Paper No 1026 November 2010, can be downloaded at http://cep.lse.ac.uk/pubs/download/dp1026.pdf The EEAG Report on the European Economy (2008), Chapter 3, "The effects of Globalisation on Western European Jobs: Curse or Blessing?", can be downloaded at: http://www.cesifo-group.de/portal/pls/portal/docs/1/1192544.PDF Optional: Ebenstein A., A. Harrison, M. McMillan, and S. Phillips (2009) estimating the Impacts of Trade and Offshoring on American Workers Using the Current Population Surveys, NBER Working Paper No. 15107, can be downloaded at the HSE weblibrary or e.g. at Ebensteins homepage http://people.rwj.harvard.edu/~aebenste/.