International Trade Theory
Lecture Location: Rio Hondo: Grupo 002, Salon 303; Grupo 003, Salon B-2
Day/Time: Monday & Wednesday: Grupo 002, 10:00-11:30am; Grupo 003, 11:30am to 1:00pm
Office Hours: Monday & Wednesday - 2:30pm to 3:30pm in Santa Teresa, or by appointment
Office Location: Centro de Investigación (CIE), ITAM, Santa Teresa
E-mail: rahul.giri@itam.mx
Syllabus - click here.
Textbooks
Primary Textbook: International Trade: Theory and Evidence, International ed (1995) by James R. Markusen, James R. Melvin, William H. Kaempfer and Keith E. Maskus. (you can access the primary textbook from Prof. Markusen's site. Download it from here.)
Secondary Textbook: International Trade, by Robert C. Feenstra and Alan M. Taylor, second edition.
Some Interesting Reading
Lecture Notes
Topic 1: Looking at the Bigger Picture
1.1: How Important is Trade or Why Should We Care About International Trade? (Chapter 1 from secondary textbook)
1.2: Gains from Trade (Chapter 4 & 5 (till page page 66) from primary textbook)
Topic 2: Models of Trade with Perfect Competition
2.1: Differences in Technology - The Ricardian Trade Model (Chapter 7 from primary textbook and Chapter 2 from secondary textbook)
- Supplementary material - Closed Economy Solution to the Ricardian Model
2.2: Differences in Endowments - The Heckscher-Ohlin Model (Chapter 8 from primary textbook and Chapter 4 from secondary textbook)
- Supplementary material - Closed Economy Solution to the HO Model
2.3: Differences in Endowments with Specific Factors - The Specific Factors Model (Chapter 9 from primary textbook)
Topic 3: Models of Trade with Imperfect Competition
3.1: Imperfect Competition as Determinant of Trade (Chapter 11 from primary textbook)
3.2: Increasing Returns to Scale as Determinant of Trade (Chapter 12 from primary textbook and Chapter 6 from secondary textbook)
3.3: Introducing Firm Level Heterogeneity in Krugman's Model of Monopolistic Competition - Melitz (2003)
- Melitz, Marc. 2003. The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity. Econometrica 71: 1695-
1725.
Topic 4: Gravity Equation
4.1: Gravity Equation
Homework
Homework 1 - Gains from Trade and Ricardian Trade Model (Question 5 to be submitted in class)
Solution to Homework 1
Homework 2 - Heckscher-Ohlin and Specific Factors Model (Question 5 to be submitted in class)
- Article to be read for homework question.
Solution to Homework 2
Homework 3 - Imperfect Competition and Trade (Question 3 to be submitted in class)
Data for Homework 3
Solution to Homework 3
Homework 4 - Gravity Equation (Question 1 to be submitted in class)
Data for homework
Solution to Question 1 of Homework 4
Solution to Question 2 of Homework 4