Insegnamento a.a. 2019-2020


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 and the looming "trade wars" triggered by the election of Donald Trump have dominated global headlines over the last three years. In this context, the old questions of international trade theory (How and when do countries gain from trade? How are gains and losses distributed in the population?) are more relevant than ever. At the same time, academic research on international trade underwent major methodological changes in the last 15 years, bringing new insights to old questions. This course aims to familiarize students with these new insights to help them to better understand the current debates. It also enables them to work with state-of-the art models and empirical tools, which is especially useful for students interested in 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.
  • 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)
  • Group assignment (report, exercise, presentation, project work etc.)


The assessment for this course is based on problem sets and on a final exam.

  1. Problem sets can be completed in groups of up to three students, and count for 30% of the final grade, with two qualifications:
    • The problem set grade only counts if it is higher than the final exam grade.
    •  If a student withdraws from an exam session, her problem set grade is set to 0.
  2. The final exam consists 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:
  • These lecture notes contain all further references.
Last change 16/06/2019 20:02