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Course 2020-2021 a.y.


Department of Economics

Course taught in English

Go to class group/s: 31

CLMG (6 credits - I sem. - OP  |  SECS-P/01) - M (6 credits - I sem. - OP  |  SECS-P/01) - IM (6 credits - I sem. - OP  |  SECS-P/01) - MM (6 credits - I sem. - OP  |  SECS-P/01) - AFC (6 credits - I sem. - OP  |  SECS-P/01) - CLELI (6 credits - I sem. - OP  |  SECS-P/01) - ACME (6 credits - I sem. - OP  |  SECS-P/01) - DES-ESS (6 credits - I sem. - OP  |  SECS-P/01) - EMIT (6 credits - I sem. - OP  |  SECS-P/01) - GIO (6 credits - I sem. - OP  |  SECS-P/01) - DSBA (6 credits - I sem. - OP  |  SECS-P/01) - PPA (6 credits - I sem. - OP  |  SECS-P/01) - FIN (6 credits - I sem. - OP  |  SECS-P/01)
Course Director:

Classes: 31 (I sem.)

Suggested background knowledge

To follow the course well, you should have some basic knowledge about solving constrained and unconstrained optimization problems, integral calculus and probability theory (especially continuous random variables). Furthermore, you should be familiar with basic microeconomic concepts such as General Equilibrium, and basic econometric concepts such as Instrumental Variables.

Mission & Content Summary

Brexit, a "trade war" between the United States and China, and the disruptions created by the Covid-19 pandemic dominate headlines around the globe. Academic research in international trade offers useful insights into these issues. In particular, it addresses questions such as: Which countries benefit and which countries lose from globalization? Within countries, which groups win and which groups lose when governments impose a tariff? This course aims to familiarize students with the newest methodologies and findings in the field of international trade. Because of its methodological aspects, it may be particularly interesting for students thinking about a research career.


The main topics covered are:

  • The History of International Trade since the Industrial Revolution.
  • Ricardian Trade Theory, from Ricardo to Eaton-Kortum.
  • The gravity equation
  • Heckscher-Ohlin Trade Theory.
  • Increasing Returns and Trade.
  • Firm Heterogeneity: the Melitz model and its applications.
  • Multinational firms and offshoring.
  • New empirical insights on trade, development and inequality.

Intended Learning Outcomes (ILO)
At the end of the course student will be able to...
  • Define the concept of comparative advantage and understand how it shapes trade patterns.
  • Describe the main reasons for international trade and their relative importance in reality.
  • Explain the methodology used by modern economic models to quantify the gains from trade and the effects of changes in trade costs.
  • Summarize the main insights obtained by models which introduce firm heterogeneity in international trade.
  • Discuss the empirical strategies used to isolate a causal effect of international trade on national income and inequality.
At the end of the course student will be able to...
  • Solve the workhouse models of international trade.
  • Analyze their main properties and comparative statics, both analytically and using specialized software (MATLAB).
  • Evaluate and argument using a rigourous economic model and mathematical proofs.
  • Develop an empirical strategy to assess the impact of international trade on economic outcomes.
  • Read and critically discuss frontier research in international trade.

Teaching methods
  • Face-to-face lectures
  • Exercises (exercises, database, software etc.)
  • Group assignments

Regular problem sets allow students to apply the knowledge acquired during the lectures. These problem sets consist in theoretical and empirical exercises, which are to be solved either analytically or using a computer. They can be done in groups, and are corrected during dedicated sessions with the Teaching Assistant of the course. They also are graded.

Assessment methods
  Continuous assessment Partial exams General exam
  • Written individual exam (traditional/online)
  •   x x
  • Group assignment (report, exercise, presentation, project work etc.)
  • x    

    The assessment for this course is based on problem sets, a mid-term exam, and a final exam.

    1. Problem sets can be completed in groups of up to three students, and count for 25% of the final grade, with two qualifications:
      • The problem set grade only counts if it is higher than the average of the mid-term and final exam.
      •  If a student withdraws from an exam session, her problem set grade is set to 0.
    2. The mid term and final exams consist of a series of short questions on the material covered during the lectures, and an exercise similar in spirit to the ones in the problem sets.

    Teaching materials
    • The main reference material for the class are my lecture notes, which are available online at: They will be updated before the class starts.
    • These lecture notes contain further references.
    Last change 17/07/2020 11:09