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Michael Olafusi

MIT: International Economics I

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You can register on MIT Opencpurseware for International Economics I at https://ocw.mit.edu/courses/economics/14-581-international-economics-i-spring-2013/ 

About the course

This course covers, with a focus on both theory and empirics, advanced topics in international trade (as well as inter-regional trade and economic geography.) It includes the study of positive issues, such as: Why do countries trade? What goods do countries trade? What are the implications of openness for the location of production, industries, occupations, and innovative activity? And, what impedes trade and why do some countries deliberately erect policy impediments to trade? The course also concerns normative issues, such as: Is trade openness beneficial to a representative agent? And, are there winners and losers from trade and if so, can we identify them? Throughout, these issues are approached in neoclassical settings as well as those with market failures, at the industry-level as well as the firm-level, and in the presence of both mobile and immobile factors (e.g., FDI, offshoring of tasks, multinational firms and immigration).


Section I: Core Models of International Trade
1 Lecture 1: Gains from Trade and the Law of Comparative Advantage (Theory)


[DN] pp. 65–79, and 94–6.


[F] pp. 179–88.

Deardorff, A. "The General Validity of the Law of Comparative Advantage." Journal of Political Economy 88, no. 5 (1980): 941–57.

Dixit, A., and V. Norman. "Gains from Trade without Lump-Sum Compensation." Journal of International Economics 21, no. 1–2 (1986): 111–22.

Samuelson, P. "The Gains from International Trade." Cambridge Journal of Economics (1939): 195–205.

2 & 3 Lecture 2&3: The Ricardian Model (Theory)


Dornbusch, R., S. Fischer, et al. "Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods." American Economic Review 67, no. 5 (1977): 823–39.

Eaton, J., and S. Kortum. "Technology, Geography and Trade." Econometrica 70, no. 5 (2002): 1741–79.

Recommended (Extensions and Generalizations):

Costinot, A. "On the Origins of Comparative Advantage." Journal of International Economics 77, no. 2 (2009): 255–64.

Grossman, G., and E. Rossi-Hansberg. "External Economies and International Trade Redux." The Quarterly Journal of Economics 125, no. 2 (2010): 829–58.

Jones, R. "Comparative Advantage and the Theory of Tariffs: A Multi-Country, Multi- Commodity Model." Review of Economic Studies 28, no. 3 (1961): 161–75.

[K] Chapter 10.

Matsuyama, K. This resource may not render correctly in a screen reader."A Ricardian Model with a Continuum of Goods under Nonhomothetic Preferences: Demand Complementarities, Income Distribution, and North-South Trade." (PDF - 2.1MB) The Journal of Political Economy 108, no. 6 (2000): 1093–120.

Wilson, Charles A. "On the General Structure of Ricardian Models with a Continuum of Goods: Applications to Growth, Tariff Theory, and Technical Change." Econometrica 48, no. 7 (1980): 1675–702.

Recommended (Extensions and Generalizations)

Alvarez, F., and R. Lucas. "General Equilibrium Analysis of the Eaton-Kortum Model of International Trade." Journal of Monetary Economics 54, no. 6 (2007): 1726–68.

Dekle, R., J. Eaton, et al. "Global Rebalancing with Gravity: Measuring the Burden of Adjustment." IMF Staff Papers 55, no. 3 (2008): 511–40.

Fieler, Ana C. "Non-Homotheticity and Bilateral Trade: Evidence and a Quantitative Explanation." Econometrica 79, no. 4 (2011): 1069–101. Mimeo.

Eaton, J., and S. Kortum. "Putting Ricardo to Work." Journal of Economic Perspectives 26, no. 2 (2012): 65–90.

4 Lecture 4: Assignment Models (Theory)


Costinot, A. "An Elementary Theory of Comparative Advantage." Econometrica 77, no. 4 (2009): 1165–92.

Costinot, A., and J. Vogel. "Matching and Inequality in the World Economy." Journal of Political Economy 118, no. 4 (2010): 747–86.

Recommended (Worker Heterogeneity and the Pattern of Trade)

Grossman, G. "The Distribution of Talent and the Pattern and Consequences of International Trade." Journal of Political Economy 112, no. 1 (2004): 209–39.

Grossman, Gene M, and G. Maggi. "Diversity and Trade." American Economic Review 90, no. 5 (2000): 1255–75.

Ohnsorge, F., and D. Trefler. "Sorting It Out: International Trade and Protection with Heterogeneous Workers." Journal of Political Economy 115, no. 5 (2007): 868–92. (NBER Working Paper no. 10959)

Recommended (Worker Heterogeneity and Labor Markets)

Acemoglu, D., and D. Autor. "Skills, Tasks and Technologies: Implications for Employment and Earnings." Handbook of Labor Economics 4 (2011): 1043–171.

Heckman, J., and B. Honore. "The Empirical Content of the Roy Model." Econometrica 58, no. 5 (1990): 1121–49.

Heckman, J., and G. Sedlacek. "Heterogeneity, Aggregation, and Market Wage Functions: An Empirical Model of Self-Selection in the Labor Market." Journal of Political Economy 93, no. 6 (1985): 1077–125.

5 Lecture 5: Gains from Trade and the Law of Comparative Advantage (Empirics)


Bernhofen, and Brown. "A Direct Test of the Theory of Comparative Advantage: The Case of Japan." Journal of Political Economy 112, no. 1 (2004): 48–67.

———. "An Empirical Assessment of the Comparative Advantage Gains from Trade: Evidence from Japan." American Economic Review 95, no. 1 (2005): 208–25.

Frankel, J., and D. Romer. "Does Trade Cause Growth?" American Economic Review 89, no. 3 (1999): 379–99.

Feyrer, J. This resource may not render correctly in a screen reader."Trade and Income Exploiting Time Series in Geography." (PDF) NBER Working Paper no. 14910, 2009.


Buy at MIT Press Buy at Amazon Rodrik, Dani, and Francisco Rodriguez. "Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence." In Kenneth Rogoff and Ben S. Bernanke. NBER Macroeconomics Annual 2000, MIT Press, 2001. ISBN: 9780262025034.

Feyrer, J. "Distance, Trade and Income – The 1967 to 1975 Closing of the Suez Canal as a Natural Experiment." NBER Working Paper no. 15557, 2009.

Broda, Christian, and David E. Weinstein. "Globalization and the Gains from Variety." The Quarterly Journal of Economics 121, no. 2 (2006): 541–85.

6 Lecture 6: The Ricardian Model (Empirics)


Costinot, Arnaud and Dave Donaldson. "What Goods Do Countries Trade? A Quantitative Exploration of Ricardo's Ideas." Review of Economic Studies 79, no. 2 (2012): 581-608.

Nunn, Nathan. "Relationship-Specificity, Incomplete Contracts, and the Pattern of Trade." The Quarterly Journal of Economics 122, no. 2 (2007): 569–600.


Mac Dougall, G. "British and American Exports: A Study Suggested by the Theory of Comparative Costs. Part I." The Economic Journal 61, no. 244 (1951): 697–724.

Stern, R. "British and American Productivity and Comparative Costs in International Trade." Oxford Economic Papers New Series 14, no. 3 (1962): 275–96.

Balassa, B. "An Empirical Demonstration of Classical Comparative Cost Theory." Review of Economics and Statistics 45, no. 3 (1963): 231–8.

Golub, and Hsieh. "Classical Ricardian Theory of Comparative Advantage Revisited." Review of International Economics 8, no. 2 (2000): 221–34.

[JK] Deardorff, A.

7 Lecture 7: Assignment Models (Empirics)


Costinot, A., and D. Donaldson. This resource may not render correctly in a screen reader."How Large Are the Gains from Economic Integration? Theory and Evidence from US Agriculture, 1880-2002." (PDF) Working Paper, 2011.

Costinot, A., D. Donaldson, et al. "Evolving Comparative Advantage and the Impact of Climate Change in Agricultural Markets: Evidence from a 9 Million-Field Partition of the Earth (PDF - 2.2MB)." 2012.

Costinot, A., and D. Donaldson. "Ricardo's Theory of Comparative Advantage: Old Idea, New Evidence." American Economic Review Papers and Proceedings 102, no. 3 (2012): 453–58.

8 & 9 Lectures 8&9: Factor Proportion Theory

Specific-Factor Model (aka Ricardo-Viner)


[DN] pp. 38–43, 86–7, and 102–6.


[JK] Jones, R., and P. Neary. "The Positive Theory of International Trade." pp. 21–7.

Buy at Amazon Bhagwati, J. "A Three Factor Model in Theory, Trade and History." Trade, Balance of Payments and Growth. Edited by R. W. Jones, R. Mundell and J. Vanek. North-Holland Publishing Company, 1975.

Heckscher-Ohlin Model


[F] pp. 31–41, 64–71, and 83–93.


[DN] pp. 106–22.

Dornbusch, R., Stanley Fischer, and Paul A. Samuelson. "Heckscher-Ohlin Trade Theory with a Continuum of Goods." The Quarterly Journal of Economics 95, no. 2 (1980): 203–24.

[JK] Ethier, W. "Higher Dimensional Trade Theory."

[HKa] Chapter 1.

Jones, R. "The Structure of Simple General-Equilibrium Models." (PDF) Journal of Political Economy 73 (1965): 557–72.

[JK] Jones, R., and P. Neary. "The Positive Theory of International Trade." pp. 14–21.

Buy at MIT Press Buy at Amazon Leamer, Edward E. The Craft of Economics: Lessons From the Heckscher-Olin Framework.  The MIT Press, 2012. IBSN: 9780262016872. 

10 & 11 Lectures 10&11: Empirics of The Heckcher-Ohlin Model

Heckscher-Ohlin: General/Introduction


Buy at MIT Press Buy at Amazon Baldwin, Robert E. The Development and Testing of Heckscher-Ohlin Trade Models: A Review (Ohlin Lectures). MIT Press, 2008. ISBN: 9780262026567.

[F] Chapters 2, and 4.

Buy at MIT Press Buy at Amazon Leamer, Edward E. The Craft of Economics: Lessons from the Heckscher-Olin Framework.  The MIT Press, 2012. IBSN: 9780262016872. 

[GR] Leamer, and Levinsohn. "International Trade Theory: The Evidence." [section 1–3 only]

Heckscher-Ohlin: 'Goods Content' of Trade Tests


Harrigan, James. "Technology, Factor Supplies, and International Specialization: Estimating the Neoclassical Model." American Economic Review 87, no. 4 (1997): 475–94. (NBER Working Paper no. 5722)

Buy at Amazon Hartigan. "Specialization and the Volume of Trade: Do the Data Obey the Laws?" Handbook of International Trade: Economic and Legal Analyses of Trade Policy and Institutions. Vol. 2. Edited by Choi and Hartigan. Wiley-Blackwell, 2005. ISBN: 9781405120623. [section 2 only].


Bernstein, Jeffrey R, and D. Weinstein. "Do Endowments Predict the Location Of Production?: Evidence from National and International Data." Journal of International Economics 56, no. 1 (2002): 55–76.

Blum, Bernardo S. "Endowments, Output, and the Bias of Directed Innovation." Review of Economic Studies 77, no. 2 (2010): 534–59.

Morrow, Peter M. "Ricardian-Heckscher-Ohlin Comparative Advantage: Theory and Evidence." Journal of International Economics 82, no. 2 (2010): 137–51.

Romalis, John. "Factor Proportions and the Structure of Commodity Trade." American Economic Review 94, no. 1 (2004): 67–97.

Schott, Peter K. "One Size Fits All? Heckscher-Ohlin Specialization in Global Production." American Economic Review 93, no. 3 (2003): 686–708.

———. "Across-Product Versus Within-Product Specialization in International Trade." The Quarterly Journal of Economics 119, no. 2 (2004): 647–78.

Heckscher-Ohlin: Factor Content of Trade Tests


Buy at Amazon Davis, and Weinstein. "The Factor Content of Trade." The Handbook of International Trade: Economic and Legal Analyses of Trade Policy and Institutions. Vol. 2. Edited by J. Choi and J. Harrigan. Wiley-Blackwell, 2005. ISBN: 9781405120623.


Antweiler, Werner and David Trefler. "Increasing Returns and All That: A View from Trade." American Economic Review 92 no. 1 (2002): 93–119.

Bernhofen, Daniel M, and Brown. This resource may not render correctly in a screen reader."Testing the General Validity Of the Heckscher-Ohlin Theorem: The Natural Experiment of Japan." (PDF) University of Nottingham Working Paper, 2009.

Bowen, Harry P, Leamer, et al. This resource may not render correctly in a screen reader."Multicountry, Multifactor Tests of the Factor Abundance Theory." (PDF - 2.43MB) American Economic Review 77, no. 5 (1987): 791–809.

Choi, and Krishna. "The Factor Content of Bilateral Trade: An Empirical Test." Journal of Political Economy 112, no. 4 (2004): 887–914.

Davis, and Weinstein, et al. This resource may not render correctly in a screen reader."Using International and Japanese Regional Data to Determine When the Factor Abundance Theory of Trade Works." (PDF - 3.1MB) American Economic Review87, no. 3 (1997): 421–46.

Davis, and Weinstein. "An Account of Global Factor Trade." American Economic Review 91, no. 5 (2001): 1423–53.

———. "Do Factor Endowments Matter for North-North Trade?" NBER Working Paper no. 8516, 2001.

Debaere, Peter. "Relative Factor Abundance and Trade." Journal of Political Economy 111, no. 3 (2003): 589–610.

Gabaix, X. "The Factor Content of Trade: A Rejection of the Heckscher-Ohlin-Leontief Hypothesis." Mimeo, Harvard, 1997.

Hakura, Dalia S. "Why does HOV fail?: The Role of Technological Differences Within the EC." Journal of International Economics 54, no. 2 (2001): 361–82.

Trefler, Daniel. "The Case of the Missing Trade and Other Mysteries." American Economic Review85, no. 5 (1995): 1029–46.

———. "International Factor Price Differences: Leontief Was Right!" Journal of Political Economy101, no. 6 (1993): 961–87.

Trefler, Daniel, and Susan Chun Zhu. "The Structure of Factor Content Predictions." Journal of International Economics 82, no. 2 (2010): 195–207.

Heckscher-Ohlin: FPE tests


Bernard, Redding, et al. This resource may not render correctly in a screen reader."Testing for Factor Price Equality with Unobserved Differences in Factor Quality or Productivity." (PDF) Working Paper.

Slaughter, Mathew. "Does Trade Liberalization Converge Factor Prices? Evidence From the Antebellum Transportation Revolution." Journal of International Trade and Economic Development 10, no. 3 (2001): 339–62.

12 & 13 Lectures 12&13: Trade Theory with Firm-Level Heterogeneity (Empirics)


[JK] Tybout. "Plant- and Firm-Level Evidence on "New" Trade Theories."

Bernard, Jensen, et al. "Firms in International Trade." Journal of Economic Perspectives 21, no. 3 (2007): 105–30.

Trefler, Daniel. "The Long and Short of the Canada-U.S. Free Trade Agreement." American Economic Review 94, no. 4 (2004): 870–95.

Helpman, Melitz, et al. "Estimating Trade Flows: Trading Partners and Trading Volumes." The Quarterly Journal of Economics 123, no. 2 (2008): 441–87.


Pavcnik, Nina. "Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants." Review of Economic Studies 69, no. 1 (2002): 245–76.

Lilleeva, Alla and Daniel Trefler. "Improved Access to Foreign Markets Raises Plant-Level Productivity...For Some Plants." (PDF) Quarterly Journal of Economics (2010): 1051. 

Eaton, Kortum, et al. "An Anatomy of International Trade: Evidence from French Firms." NBER Working Paper No. 14610, 2008.

Bernard, Eaton, et. al. "Plants and Productivity in International Trade." American Economic Review 93, no. 4 (2003): 1268–90.

Roberts, and Tybout. "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs." American Economic Review 87, no. 4 (1997): 545–64.

Bernard, Andrew B., and J. Bradford Jensen. "Exceptional Exporter Performance: Cause, Effect, or Both?" Journal of International Economics 47, no. 1 (1999): 1–25.

14 & 15 Lectures 14&15: Trade Theory with Firm-Level Heterogeneity (Theory)

Monopolistic Competition with Firm-Level Heterogeneity


Melitz, M. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity." Econometrica 71, no. 6 (2003): 1695–725.

Melitz, M., and S. Redding. "Heterogeneous Firms and Trade." NBER Working Paper No. 18652, 2012. (Handbook (2013))


Arkolakis, Costas. "Market Penetration Costs and the New Consumers Margin in International Trade." Journal of Political Economy 118, no. 6 (2010): 1151–99.

Arkolakis, C., and M. Muendler. "The Extensive Margin of Exporting Products: A Firm-Level Analysis." Mimeo, 2010.

Bernard, S. Redding, et al. This resource may not render correctly in a screen reader."Comparative Advantage and Heterogeneous Firms." (PDF) Review of Economic Studies 74, no. 1 (2007): 31–66.

———. "Multi-product Firms and Trade Liberalization." The Quarterly Journal of Economics 126, no. 3 (2011): 1271–318.

Chaney, T. This resource may not render correctly in a screen reader."Distorted Gravity: Heterogeneous Firms, Market Structure and the Geography of International Trade." (PDF) American Economic Review (2006).

Helpman, E., O. Itskhoki, et al. "Inequality and Unemployment in a Global Economy." Econometrica 78, no. 4 (2010): 1239–83.

Mayer, T., M. Melitz, et al. This resource may not render correctly in a screen reader."Market size, Competition, and the Product Mix of Exporters." (PDF)Mimeo, 2009.

Melitz, Marc, and Gianmarco Ottaviano. "Market Size, Trade and Productivity." Review of Economic Studies 75, no. 1 (2008): 295–316.

Sampson, T. This resource may not render correctly in a screen reader."Selection into Trade and Wage Inequality." (PDF) Mimeo, 2012.

Monopolistic Competition without Firm-Level Heterogeneity (Not Covered in Class)


[HKa] Chapters 6, and 9.

[K] Chapters 1, and 3.

Fajgelbaum, P., G. Grossman, et al. This resource may not render correctly in a screen reader."Income Distribution, Product Quality, and International Trade." (PDF) Journal of Political Economy 119, no. 4 (2011): 721–65.

Other Oligopolistic Settings (Not Covered in Class)


[HKa] Chapter 5.

[K] Chapter 4.

Neary, P. This resource may not render correctly in a screen reader."International Trade in General Oligopolistic Equilibrium." (PDF) Mimeo.

16 Lecture 16: Gravity Models and the Gains From Trade


Arkolakis, C., and Arnaud Costinot. "New Trade Models, Same Old Gains?" American Economic Review 102, no. 1 (2012): 94–130.

Costinot A., and A. Rodriguez-Clare. "Trade Theory with Numbers: Quantifying the Consequences of Globalization." NBER Working Paper no. 18896, 2013. Handbook


Arkolakis, C., A. Costinot, et al. This resource may not render correctly in a screen reader."The Elusive Pro-Competitive Effects of Trade." (PDF) Mimeo, 2012.

Atkeson, A., and A. Burstein "Innovation, Firm Dynamics, and International Trade." Journal of Political Economy 118, no. 3 (2010): 433–84.

Burstein, A., and J. Vogel. This resource may not render correctly in a screen reader."Globalization, Technology, and the Skill Premium: A Quantitative Analysis." (PDF) Mimeo, 2008.

Ramondo, N., and A. Rodriguez-Clare. "Trade, Multinational Production, and the Gains from Openness." Journal of Political Economy 121, no. 2 (2013): 273–322. (NBER Working Paper no. 15604)

17 Lecture 17: Empirics of Gravity Models


Anderson, James E, and Van Wincoop. "Trade Costs." Journal of Economic Literature 42 (2004): 691–751.

Hummels, David. "Transportation Costs and International Trade in the Second Era of Globalization." Journal of Economic Perspectives 21, no. 3 (2007): 131–54.

Trefler, and Lai. Working Paper 2002.

Head, and Mayer. Handbook chapter draft. (2013).

Donaldson, Dave. "Railroads of the Raj: Estimating the Impact of Transportation Infrastructure." NBER Working Paper no. 16487, 2010.

Recommended (Gravity Equation Estimation)

Anderson, James E., and Van Wincoop. "Gravity with Gravitas: A Solution to the Border Puzzle." American Economic Review 93, no. 1 (2003): 170–92.

Rauch, James E. "Networks Versus Markets in International Trade." Journal of International Economics 48, no. 1 (1999): 7–35.

Hummels, and Hilberry. "Trade Responses to Geographic Frictions: A Decomposition Using MicroData." European Economic Review 52, no. 3 (2008): 527–50. (NBER Working Paper no. 11339)

Section II: Miscellaneous Topics in Trade
18 Lecture 18: Trade Costs


Buy at Amazon Fackler, and Goodwin. "Spatial Price Analysis." In Handbook of Agricultural Economics Volume 1B: Marketing, Distribution, and Consumers. Edited by Gardner and Rausser. North Holland, 2001. ISBN: 9780444507297.

Engel, and Rogers. "How Wide is the Border?" American Economic Review 86, no. 5 (1996): 1112–25.

Goldberg, and Verboven. "Market Integration and Convergence to the Law of One Price: Evidence from the European Car Market." Journal of International Economics 65, no. 1 (2005): 49–73.

Buy at Amazon Greif, Avner. Institutions and the Path to the Modern Economy: Lessons From Medieval Trade.Cambridge University Press, 2006. ISBN: 9780521671347.

 Obstfeld, Maurice, and Rogoff. "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?" NBER Macroeconomics Annual 15, 2001.

Buy at MIT Press Buy at Amazon Fafchamps. Market Institutions in Sub-Saharan Africa: Theory and Evidence. MIT Press, 2004. ISBN: 9780262062367.

19 & 20 Lecture 19&20: Offshoring and Fragmentation of Production

Recommended (Theory)

Antràs, P., L. Garicano, et al. "Offshoring in a Knowledge Economy." The Quarterly Journal of Economics 121, no. 1 (2006): 31–77. (NBER Working Paper no. 11094)

Antras, P., and E. Rossi-Hansberg. "Organizations and Trade." Annual Review of Economics 1, no. 1 (2009): 43–64. (NBER Working Paper no. 14262)

Costinot, A., J. Vogel, et al. "An Elementary Theory of Global Supply Chains." Review of Economic Studies 80, no. 1 (2013): 109–44. (NBER Working Paper no. 16936)

Burstein A., and A. Monge-Naranjo. "Foreign Know-How, Firm Control, and the Income of Developing Countries." The Quarterly Journal of Economics 124, no. 1 (2009): 149–95.

Grossman, Gene M, and E. Rossi-Hansberg. "Trading Tasks: A Simple Theory of Offshoring." American Economic Review 98, no. 5 (2008): 1978–97.

———. "Task Trade between Similar Countries." Econometrica 80, no. 2 (2012): 593-629. 

Kremer, M., and E. Maskin. This resource may not render correctly in a screen reader."Globalization and Inequality." (PDF - 1.34MB) Mimeo, Harvard University, 2006.

Nocke, V., and S. Yeaple. "An Assignment Theory of Foreign Direct Investment." Review of Economic Studies 75, no. 2 (2008): 529–57.

Rodriguez-Clare, A. "Offshoring in a Ricardian World." American Economic Journal: Macroeconomics 2, no. 2 (2010): 227–58.

Yi, K. "Can Vertical Specialization Explain the Growth of World Trade?" Journal of Political Economy 111, no. 1 (2003): 52–102.

———. "Vertical Specialization and the Border Effect Puzzle." American Economic Review, 2005. (Federal Reserve Bank of Philadelphia Working Paper no. 05-24).

Recommended (Empirics)

Hummels, Jorgensen, et al. This resource may not render correctly in a screen reader."The Wage and Employment Effects of Outsourcing: Evidence from Danish Matched Worker Firm Data." (PDF) Working Paper, 2010.

Amiti, Mary, and Wei. This resource may not render correctly in a screen reader."Service Offshoring and Productivity: Evidence from the US." (PDF) CEPR Working Paper, 2006.

Jensen, and Kletzer. This resource may not render correctly in a screen reader."Measuring Tradable Services and the Task Content of Offshorable Services Jobs." (PDF) UCSC Working Paper, 2007.

Liu, and Trefler. " Much Ado About Nothing: American Jobs and the Rise of Service Outsourcing to China and India." NBER Working Paper No. 14061, 2008.

Feenstra, and Hanson. "The Impact of Outsourcing and High-Technology Capital on Wages: Estimates For The United States, 1979–1990." The Quarterly Journal of Economics114, no. 3 (1999): 907–40.

Hsieh, Chang-Tai, and Woo. "The Impact of Outsourcing to China on Hong Kong's Labor Market." American Economic Review 95, no. 5 (2005): 1673–87.

Ebeinstein, Harrison, et al. "Estimating the Impact of Trade and Offshoring on American Workers Using the Current Population Surveys." NBER Working Paper no. 15107, 2009.

Autor, and Handel. "Putting Tasks to the Test: Human Capital, Job Tasks and Wages." NBER Working Paper no. 15116, 2009.

Hummels, Jorgensen, et al. This resource may not render correctly in a screen reader."The Wage and Employment Effects of Outsourcing: Evidence from Danish Matched Worker Firm Data." (PDF) Working Paper, 2010.

Blinder, Alan, and Alan Krueger. "Alternative Measures of Offshorability: A Survey Approach." NBER Working Paper No. 15287, 2009.

Blinder, Alan. "How Many U.S. Jobs Might Be Offshorable?" Princeton Working Paper, 2007.

Jensen, and Kletzer. "Measuring Tradable Services and the Task Content of Offshorable Services Jobs." UCSC Working Paper, 2007.

Amiti, and Wei. This resource may not render correctly in a screen reader."Service Offshoring, Productivity and Employment: Evidence from the US." (PDF) CEPR Working Paper, 2006.

Becker, Sascha, Karolina Elkholm, and Marc-Andreas Muendler. "Offshoring and The Onshore Composition of Tasks and Skills." UCSD Working Paper, 2009.

21 & 22 Lecture 21&22: Economic Geography


Buy at MIT Press Buy at Amazon Fujita, Masahisa, Paul Krugman, and Anthony J. Venables. The Spatial Economy: Cities, Regions and International Trade. MIT Press, 1999. ISBN: 9780262062046.

Redding, and Sturm. American Economic Review 2007.

Bleakley, and Yin. The Quarterly Journal of Economics 2011.

Greenstone, Hornbeck and Moretti. The Journal of Political Economy 2010.

23 & 24 Lecture 23&24: Trade Policy and Trade Agreements (Theory)

Essential (Trade Policy)

[HKb] Chapter 2.

G., Grossman, and E. Helpman. "Protection for Sale." American Economic Review 84, no. 4 (1994): 833–50.

Recommended (Trade Policy)

Buy at Amazon Dixit, A. "Tax Policy in Open Economies." Handbook of Public Economics. Vol. 1. Edited by A. Auerbach and M. Feldstein. North Holland, 1985. ISBN: 9780444876126.

Johnson, H. G. "Optimum Tariffs and Retaliation." Review of Economic Studies 1953.

[GR] Rodrik, D. "The Political Economy of Trade Policy."

Essential (Trade Agreements)

[BS] Chapter 2.

Recommended (Trade Agreements)

Bagwell, Kyle, and R. W. Staiger. "An Economic Theory of GATT." American Economic Review 89, no. 1 (1999): 215–48.

Grossman, G., and E. Helpman. "Trade Wars and Trade Talks." Journal of Political Economy 103, (1995): 675–708. (NBER Working Paper no. 4280)

Maggi, G., and A. Rodríguez-Clare. "The Value of Trade Agreements in the Presence of Political Pressures." Journal of Political Economy 106, no. 3 (1998): 574–601.

Horn, Henrik, G. Maggi, et al. "Trade Agreements as Endogenously Incomplete Contracts." American Economic Review 100, no. 1 (2010): 394–419.

Ossa, R. "A 'New Trade' Theory of GATT/WTO Negotiations." Mimeo, 2010.

Strategic Trade Policy (Not Covered in Class)

[GR] Brander, J. "Strategic trade policy."

Brander, J., and B. Spencer. This resource may not render correctly in a screen reader."Export Subsidies and International Market Share Rivalry." (PDF)Journal of International Economics 18 (1985): 83–100.

Eaton, J., and G. Grossman. "Optimal Trade Policy and Industrial Policy Under Oligopoly." The Quarterly Journal of Economics 101, no. 2 (1986): 383–406.

[HKb] Chapters 3, 4, 5, 6, and 8.

Maggi, G. "Strategic Trade Policies with Endogenous Mode of Competition." American Economic Review 86, no. 1 (1996): 237–58.

25 & 26 Lecture 25&26: Political Economy of Trade Policy and the WTO (Empirics)

Recommended (Political Economy of Trade Policy)

Goldberg, Pinelopi Koujianou, and Maggi. "Protection for Sale: An Empirical Investigation." American Economic Review 89, no. 5 (1999): 1135–55.

[JK] Gawande, and Krishna. "The Political Economy of Trade Policy: Empirical Approaches."

Trefler, Daniel. "Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of US Import Policy." Journal of Political Economy 101, no. 1 (1993): 138–60.

Recommended (Evidence on the role of the WTO and Trade Agreements)

Broda, Christian, Nuno Limão, and David E. Weinstein. "Optimal Tariffs and Market Power: The Evidence." American Economic Review 98, no. 5 (2008): 2032-2065. 

Limao, Nuno. "Preferential Trade Agreements as Stumbling Blocks for Multilateral Trade Liberalization: Evidence for the United States." American Economic Review 96, no. 3 (2006): 896–914.

Rose, Andrew K. "Do We Really Know That the WTO Increases Trade?" American Economic Review 94, no. 1 (2004): 98–114.

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