Sciences Po, Paris

Lecture, M1

International Trade
Lecturers: Thierry Mayer
& Farid Toubal

 

Objectives of the course

This course will provide students with the analytical tools that are essential to understand the process of globalization through the international trade in goods. Lectures will focus on the key topics that are at the center of the policy debate: why do countries open to trade? What are the effects of free trade on the process of economic development and inequality? Why do countries restrict the exchange of goods, and what can we say about the effects of protectionism on trade and welfare?

At the end of the course, students are expected to have a good knowledge of the mechanisms and predictions from the traditional models of trade, and from the New Trade Theory.  Students will also be able to read simple research articles that can be used for the writing of policy notes.

The 8 courses of 3 hours each (24 hours) . The last lecture takes place on the 28th of October.

The lectures will be organized as follows: the lectures will be designed to treat the main topics of the course.  Farid Toubal will be in charge of the first part of the course, which will give an overview of the main theories in international trade. Thierry Mayer will be in charge of the second part of the course covering gravity equations as a tool for analyzing trade integration, and economic geography that has been an important component of recent international economic analysis. Two topics relevant to the more general PSIA themes will close the lecture: how globalization affects military conflicts and cultural patterns.

Evaluation

Grades are based a mid-term exam (50%) and a final exam (50%). The Midterm will take place on the 22nd of October between 13:30-15:30. The final exam takes place in December.

Last year midterm

Main textbook and additional readings

Krugman P, Obstfeld M. (2008). International Economics: Theory and Policy. Pearson

Combes P.P, Mayer T. and J., Thisse (2008) Economic Geography, Princeton University Press

Additional reading may complete the K-O  and CMT chapters and will be provided before the lectures. Feenstra provides an advanced lecture for aficionados.

Feenstra (2009). Advanced International Trade: Theory and Evidence. Princeton University Press.

Telos and Vox are two blogs that publish research-based policy articles from leading economists. A lot of the articles cover trade-related topics.

Chapters of the course

The 5 first chapters will be taught by F. Toubal, the last ones by T. Mayer

  1. Globalization: some historical perspective (2 hours) – Print
    • K-O chapter 2: “World trade, an overview
    • Baldwin, R. And Martin, P. (1999): “Two waves of globalization: superficial similarities, fundamental differences”, NBER Working Paper 6904
    • Aficionado?
      • Kevin O'Rourke and Jeffrey Williamson. Globalization and History: The Evolution of a Nineteenth-Century Atlantic Economy, MIT Press.
  2. The balance of payments: accountability and global (im)balances (2 hours) – Print
  3. Ricardo: productivity and the comparative advantage (2 hours) – Print
  4. Heckscher, Ohlin and Samuelson: trade and wages (4 hours) – Print
  5. Monopolistic competition and international trade between similar countries (2 hours) Print
  6. Gravity as a tool for measuring integration (2 hours) Print
  7. Economic Geography – Theory (2 hours) – Print
    • Fujita, Krugman and Venables (1999), chapters 4 and 5
    • CMT, chapters 4 and 5
  8. Economic Geography – Empirics (4 hours) – Print
    • CMT, chapters 10 to 13
    • Head, K., and T. Mayer, 2004,  ``The Empirics of Agglomeration and Trade", chapter 59 in the Handbook of Regional and Urban Economics Vol. 4 edited by V. Henderson and J.F. Thisse.
  9. Trade and political disputes (2 hours) Print
    • Martin P., Mayer T., Thoenig M., 2006, ``La mondialisation est-elle un facteur de paix ?'' Opuscule du CEPREMAP 3. Paris : Ed. ENS rue d'Ulm,, 53 p.
  10. Trade and cultural diffusion (2 hours) Print
    • Guizo, Sapienza and Zingales, 2009, Cultural Biases in Economic Exchange?, Quarterly Journal of Economics, August 2009, Vol. 124, No. 3: 1095-1131.
    • Maystre A., Olivier J., Thoenig M. & Verdier T. (2009). Product-based cultural change: is the village global? (7438). CEPR.