This course looks at different underlying causes of international trade and multinational activities and how this may relate to changing patterns of trade, income distributional consequences and alikeMicro-economic tools will be used to explore theoretical models of international trade. Presented theories will be complemented by references to related empirical studies.One part of the course will mainly review key features of traditional models of trade under perfect competition and, in addition, look at an extension of traditional Heckscher-Ohlin theory to discuss whether and how trade and environmental policy could be related. The other part of the course will deal with models of trade beyond perfect competition and the formation of multinational enterprises. 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 comprises both lectures and practice sessions. For practice sessions, students are asked to prepare problem sets at home in order to review and deepen understanding of lecture contents. Answers to the exercises will have to be submitted via Moodle: Students should be ready to discuss their suggested solutions during practice sessions. To prepare and practice for the final exam and as a follow-up to practice sessions, students are also asked to solve online quizzes. Problem sets:Problem sets will be made available via learning platform Moodle.Students are asked to find answers and tick boxes for questions they are willing to present. Additionally, students are required to upload their answers – one file with all answers - via Moodle on Wednesday evening before a practice session.Further details to be discussed at the beginning of the course. 

Part 0: Introductory Part(Equilibrium concepts and )General Equilibrium in the context of International Trade ModelsPart A: Traditional Trade Models and the EnvironmentRicardian Trade ModelHeckscher-Ohlin Model of TradeTrade and Environmental RegulationPart B: Trade under Imperfect Competition Oligopoly and TradeIncreasing returns to Scale, Monopolistic Competition and Intra-Industry TradeMultinational Firms, FDI and Fragmentation of Production

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 EconomicsVC MacroeconomicsVO: Methodology 1VO: Methodology 2

Markusen & Maskus: International trade: Theory and evidence, McGrawHill, 1995  (Part A)V. Marrewijk, International Trade, Oxford University Press, 2017 (Part B)Feenstra, Advanced international trade, Princeton University Press, 2015Additionally:Copeland and Taylor, Trade and the Environment: Theory and Evidence, Princeton University Press, 2003Navaretti and Venables, Multinational Firms in the World Economy, Princeton University Press, 2015Irwin, Free Trade Under Fire, Princeton University Press 2020A detailed list of chapters will be provided via Moodle.

Students are expected to attend sessions, present some of their homework assignments and actively participate in class. Attendance of practice sessions is mandatory.  However, you may miss a max. of two sessions. Throughout the semester, there will be  homework exercises to prepare for practice sessions and quizzes to wrap-up expected learning outcome of corresponding practice sessions.  Further, there will be a final  (lecture) exam that comprises 10 multiple-choice questions with four statements each. For practice sessions incl. quizzes a total max. of 60 credits can be received - 10 for each of five problem sets and a total of 10 for all quizzes. For the final exam the max. attainable score is 40 credits.  The final exam will take place beginning of July and/or end of September.  You need to enroll yourself for it in ZEUS. Please note that you are required to successfully complete practice sessions and pass the final exam in order to receive a positive rating for course participation. 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. 

Course's content (incl. practice sessions)

REPEATED ABSENCE WITHOUT PRIOR NOTIFICATION WILL RESULT IN NEGATIVE RATING. There is a possibility to receive bonus credits for especially active course participation.For practice session, the pass mark (minimum required points) is 35 out of 60 from homework assignments and quizzes. For the exam, pass mark is 22 out of 40. Both parts account for 50% of the final grade.