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Warning! The directory is not yet complete and will be amended until the beginning of the term.

040247 UK International Trade (MA) (2020W)

Track in Macroeconomic Policy

4.00 ECTS (2.00 SWS), SPL 4 - Wirtschaftswissenschaften
Continuous assessment of course work


Note: The time of your registration within the registration period has no effect on the allocation of places (no first come, first served).


max. 50 participants
Language: English


Classes (iCal) - next class is marked with N

Update: Following the government's announcement of 31.10.2020, this course's meetings will be online only until further notice. The course's evaluation criteria remain unaffected.

Tuesday 06.10. 18:30 - 20:00 Hörsaal 13 Oskar-Morgenstern-Platz 1 2.Stock
Tuesday 13.10. 18:30 - 20:00 Hörsaal 13 Oskar-Morgenstern-Platz 1 2.Stock
Tuesday 20.10. 18:30 - 20:00 Hörsaal 13 Oskar-Morgenstern-Platz 1 2.Stock
Tuesday 27.10. 18:30 - 20:00 Hörsaal 13 Oskar-Morgenstern-Platz 1 2.Stock
Tuesday 03.11. 18:30 - 20:00 Hörsaal 13 Oskar-Morgenstern-Platz 1 2.Stock
Tuesday 10.11. 18:30 - 20:00 Hörsaal 13 Oskar-Morgenstern-Platz 1 2.Stock
Tuesday 17.11. 18:30 - 20:00 Hörsaal 13 Oskar-Morgenstern-Platz 1 2.Stock
Tuesday 24.11. 18:30 - 20:00 Hörsaal 13 Oskar-Morgenstern-Platz 1 2.Stock
Tuesday 01.12. 18:30 - 20:00 Hörsaal 13 Oskar-Morgenstern-Platz 1 2.Stock
Tuesday 15.12. 18:30 - 20:00 Hörsaal 13 Oskar-Morgenstern-Platz 1 2.Stock
Tuesday 12.01. 18:30 - 20:00 Hörsaal 13 Oskar-Morgenstern-Platz 1 2.Stock
Tuesday 19.01. 18:30 - 20:00 Hörsaal 13 Oskar-Morgenstern-Platz 1 2.Stock
Tuesday 26.01. 18:30 - 20:00 Hörsaal 13 Oskar-Morgenstern-Platz 1 2.Stock


Aims, contents and method of the course

The course will cover the most important models in the field of international trade, as well as the related empirical evidence and applications to questions of interest in economics and policy debates (determination of income per capita and economic growth, effects of trade liberalizations, links between trade and unemployment, etc.).

In view of the uncertainty surrounding the evolution of covid-19, at the moment (late August) I can only describe a contingent plan for the course’s format. The plan maximizes the amount of physical presence subject to two principles: i. Defense of the interests of students who, in the context of covid-19, might be high-risk patients or might not be allowed in Austria. ii. Respect of the University’s regulations.

1. If all students can attend and the class-room can accommodate all students with the required social distance, the course will be taught with physical presence.

2. If not all students can attend, the class-room can accommodate the rest of them and has the required equipment, the format will be hybrid: I will teach both for students in the class-room and online (synchronously) via Collaborate or equivalent.

3. If the class-room cannot accommodate all students but has the required equipment, I will divide the students than can attend in groups and do as in 2, with one group in the class-room and the rest online (synchr.). Groups will take turns in the class-room.

4. If the class-room does not have the required equipment and the circumstances in 1 do not hold (or should we all be sent home as in the 2020S) I will teach online (synchr.).

Assessment and permitted materials

The assessment will be based on a midterm and a final exam (each 40% of the final mark) and a term paper (20%).

Minimum requirements and assessment criteria

All required. 50% of overall mark required to pass the course. The objective of the course is to have students apply and develop the analytical skills acquired in the MA in Economics in the field of International Trade.

Examination topics

Armington model and gravity equation, Ricardian model (trade and technology), Heckscher-Ohlin model (trade and factor abundance), institutions and trade, Krugman model (increasing returns and imperfect competition), Melitz model (firm heterogeneity), foreign direct investment and multinational corpoprations.

Reading list

Anderson, J.E. and E. van Wincoop (2002): “Gravity with Gravitas: A Solution to the Border Puzzle,” American Economic Review, 93(1), pp. 170-192

Cuñat, A., and R. Zymek (2018): “International Value-Added Linkages in Development Accounting,” ESE Discussion Papers 281, Edinburgh School of Economics, University of Edinburgh

Cuñat, A., and R. Zymek (2020): “The (Structural) Gravity of Epidemics,” Covid Economics: Vetted and Real-Time Papers, May, 17, pp. 153-173

Cuñat, A. and M.J. Melitz (2012): “Volatility, Labor Market Flexibility, and the Pattern of Comparative Advantage,” Journal of the European Economic Association, April, 10(2), pp. 225-254

Krugman, P.R. (1987): “The Narrow Moving Band, the Dutch Disease, and the Competitive Consequences of Mrs. Thatcher: Notes on Trade in the Presence of Dynamic Scale Economies,” Journal of Development Economics, 27, pp. 41-55

Eaton, J. and S. Kortum (2002): “Technology, Geography, and Trade,” Econometrica, 70, pp. 1741-1779

Obstfeld, M. and K. Rogoff (1996): Foundations of International Macroeconomics, MIT Press, Chapter 4, pp. 235-256

Cuñat, A. and C. Fons-Rosen (2013): “Relative Factor Endowments and International Portfolio Choice,” joint with Christian Fons-Rosen, Journal of the European Economic Association, 11(1), pp. 166-200

Cuñat, A. and M. Maffezzoli (2007): “Specialization Patterns and the Factor Bias of Technology,” B.E. Journal of Macroeconomics (Contributions), 7(1), Art. 16

Davis, D.R. (1998): “Does European Unemployment Prop Up American Wages? National Labor Markets and Global Trade,” American Economic Review, June, 88(3), pp. 478-494

Helpman, E. and P.R. Krugman (1985): Market Structure and Foreign Trade, MIT Press, chapter 1

Trefler, D. (1993): “International Factor Price Differences: Leontief Was Right!” Journal of Political Economy, Dec., 101(6), pp. 961-987

Broda, C. and D.E. Weinstein (2006): “Globalization and the Gains from Variety,” Quarterly Journal of Economics, May

Costinot, A., D. Donaldson, M. Kyle and H. Williams (2019): “The More We Die, the More We Sell? A Simple Test of the Home-Market Effect,” Quarterly Journal of Economics

Krugman, P.R. (1979): “Increasing Returns, Monopolistic Competition, and International Trade,” Journal of International Economics, November 9 (4), pp. 469-479

Krugman, P.R. (1980): “Scale Economies, Product Differentiation, and the Pattern of Trade,” American Economic Review 70, pp. 950-959

Krugman, P.R. (1981): “Intra-industry Specialization and the Gains from Trade,” Journal of Political Economy, 89 (5), 959-974

Bernard, A.B., J.B. Jensen, S.J. Redding and P.K. Schott (2007): “Firms in International Trade,” Journal of Economic Perspectives, 21(3), pp.105-130

Carluccio, Juan, Alejandro Cuñat, Harald Fadinger and Christian Fons-Rosen (2019): “Offshoring and Skill-upgrading in French Manufacturing,” Journal of International Economics, Volume 118, May, pp. 138-159

Melitz, M.J. (2003): “The Impact of Trade on Intra-industry Reallocations and Aggregate Industry Productivity,” Econometrica, 71, pp. 1695-1725

Trefler, D. (2004): “The Long and Short of the Canada-U.S. Free Trade Agreement,” American Economic Review, 94, pp. 870-895

Antràs, P. (2003): “Firms, Contracts, and Trade Structure,” Quarterly Journal of Economics, 118 (4), 1375-1418

Helpman, E. (1984): “A Simple Theory of International Trade with Multinational Corporations,” Journal of Political Economy, 451-71

Helpman, E., M.J. Melitz and S. Yeaple (2004): “Export versus FDI with Heterogeneous Firms,” American Economic Review, 94: 300-316

Association in the course directory

Last modified: Mo 02.11.2020 16:48