This course looks at different underlying causes of international trade and multinational activity, the gains from trade, changing patterns of trade and possible income distributional consequences.Mostly micro-economic tools will be used to explore in a more formal manner theoretical models of international trade. Additionally, some references to data and empirical studies related to the presented theories are given.Part I will review key features of traditional models of trade under perfect competition, mainly Ricardian and Heckscher-Ohlin theories. Part II will move onto models of trade beyond perfect competition with an eye on trade between similar countries, the formation of multinational enterprises and firm heterogeneity. After completing the course, students should be able to compare - at a basic level of formal analysis - major models of international trade and be able to distinguish between them in terms of their assumptions and economic implications.

This course consists of two parts - lectures and practice sessions. For practice sessions, students are asked to solve problem sets at home in order to review and deepen their understanding of lecture contents. Solutions will have to be submitted via Moodle and students should be ready to discuss their solutions during practice sessions. To prepare and practice for the final exam, students are also aksed to solve some multiple choice quiz questions. Further details to be discussed at the beginning of the course. 

Part 0: Introductory PartEquilibrium concepts and General Equilibrium in the context of International Trade ModelsPart I: Trade under Perfect CompetitionRicardian Trade ModelHeckscher-Ohlin Model of TradePart II: Trade under Imperfect Competition (Potential Topics)Oligopoly and TradeIncreasing returns to Scale, Monopolistic Competition and Intra-Industry TradeMultinational Firms, FDI and Fragmentation of Production Trade and Environmental Regulation

Sufficient prior knowledge of microeconomics, statistics and mathematics as well as introductory knowledge of international trade, in particular. Comprehensive knowledge ofVO StEOP – Introduction to EconomicsVC MicroeconomicsVO Introduction to International TradeVO Economic PolicyVC Macroeconomicsand a good grasp of the materials presented in the Statistics and Mathematics foundational courses is recommended, but will not be officially checked. 

[MM 1995] Markusen & Maskus: Internationaltrade: Theory and evidence, McGrawHill, 1995 https://mpra.ub.uni-muenchen.de/21989/1/MPRA_paper_21989.pdf[MM 2011] Markusen & Maskus: Internationaltrade: Theory and evidence, Copyright J. R. Markusen and K.E. Maskus, 2011.http://spot.colorado.edu/~markusen/Markusen-Maskus_textbook.pdfFurther Recommended Literature:[F 2015] Feenstra: Advanced international trade, Princeton University Press, 2015[F 2017] Feenstra & Taylor: InternationalTrade, Worth Publishers, 2017 [KOM 2018] Krugman, Obstfeld & Melitz:International Economics, Theory and Policy, Pearson, 2018Further references will be given in class and/or via Moodle.

IN ORDER TO ATTEND CLASSES, PLEASE SIGN UP FOR THE COURSE IN MOODLE. Students are expected to attend and actively participate in class and perform sufficiently on all course assignments. Attendance is mandatory, yet, you are allowed to miss two sessions.Course assignments will consist of homework exercises to prepare for practice sessions (as well as shorter quizzes as a wrap-up for sessions) and a final online-multiple-choice-exam. For homework exercises and the quizzes a total of 60 credits can be earned, for the final exam a total of 40 credits.The final exam will take place at the end of the term.  Taking part in the exam is obligatory. You need to enroll yourself for it in ZEUS. If you do not succeed at the first attempt, you will have a chance to retake the exam at the end of July/beginning of August.You should reach 36 out of 60 from homework assignments and quizzes. For the exam, pass mark is 28 out of 40. Both your exam and assignments result account for 50% of your grade.Please note that both the successful completion of practice sessions and passing the final exam are necessary in order to complete this course successfully. If you fail one part, you will have to re-attend the course in another semester. Further details will be available in Moodle and announced in class.

Lecture SlidesAssignments for practice sessions

The final exam will take place at the end of the term.  Taking part in the exam is obligatory. You need to enroll yourself for it in ZEUS. If you do not succeed at the first attempt, you will have a chance to retake the exam at the end of July/beginning of August.You should reach 36 out of 60 from homework assignments and quizzes. For the exam, pass mark is 28 out of 40. Both your exam and assignments result account for 50% of your grade.