In this course we review the most recent developments in the international trade literature. The first half of the course tackles work horse models. After a brief review of classical two-sector models, the theoretical foundations and empirical basics of gravity equations are covered. Then, the course moves to a short introduction of trade models with heterogenous firms which lays the basic for the modern theory of multinational firms and the analysis of global value chains (GVCs). In the second half, the course moves to trade policy. First, it provides an overview of quantitative models of trade policy and their application. Then, it reviews the empirics of trade policy. The course turns to the political economy of trade policy including the recent backlash against globalization. It ends with a discussion of preferential trade agreements and the environmental impact of globalization.

The course should provide students with the necessary analytical tools to follow the advanced economic literature in the area of international trade. It always relates to empirics and trade policy applications. Students should be enabled to conduct own applied research so that they are well prepared for a carreer in academia, research institutes, ministries, international institutions, central banks, or interest representations. 

Attendance required.

Teaching/learning methods of this course consist of lectures, private studying of reading material, exercises and short student presentations.

Assessment depends on student discussions (20%), assignments (30%) and a final exam (50%).

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felbermayr@wifo.ac.at