20269 - ECONOMICS OF EUROPEAN INTEGRATION
Course taught in English
Go to class group/s: 31
Class 31: CARLO ALTOMONTE
In 1995 advanced economies were responsible for around 60% of the world GDP, while the ‘Developing countries’ covered the remaining 40%. Trade (world exports) were around 15% of the world GDP. On that year the World Trade Organization was established, and in 2001 China became part of that organization. Twenty years or so after the creation of the WTO (and after a major financial crisis), ‘advanced’ economies are responsible for slightly more than 40% of world GDP, while emerging economies account for the rest. China alone accounts for more than 15% of the world share nowadays, from little more than 3 per cent in 1995. Trade (world exports) is now almost 30% of world GDP, twice as much than in 1995, while yearly Foreign Direct Investment, the capital and technology of multinational companies flowing across countries in the world, are five times larger, from around $300 Bln per year in the mid 90s to 1.5Trl $ per year. These fast and structural changes are generating profound consequences on societies, requiring new tools of analysis to understand them and to develop adequate policy responses. The course introduces you these tools, using the process of European integration as a benchmark concrete case to apply them, together with possible policy solutions.
The course is organized around three main sub-sections:
- Part I on Economic integration and growth.
- Part II on the effects of Economic integration on society.
- Part III on Economic integration and regional disparities.
The course covers (among others) in particular:
- The relation between globalization, firm selection (productivity & growth) and reallocation of resource (working of labor markets).
- The impact of globalization on political and economic outcomes (e.g. Brexit or income distribution).
- The (resulting) uneven distribution of economic activities across space (causes, consequences and policy solutions).
- Manage large firm-level datasets through adequate econometric software.
- Calculate productivity at the firm level.
- Estimate instrumental variable models to establish the impact of economic shocks on societal outcomes.
- Have a broad knowledge of state-of-the-art models of economic integration.
- Apply formal theoretical models, as well as econometric tools, to analyze real & current economic policy issues, especially related to the process of European integration (but not only…).
- The set of skills developed through the course is increasingly valued in International Organizations where enrolled students typically end up for internships (EC, ECB, UN, OECD, etc…).
- Face-to-face lectures
- Group assignments
Economic theory and econometric tools are directly applied by students (working in groups, 4-5 members) on actual (firm-level) data provided by the course instructor in order to derive a group-specific analysis / solution to the problems tackled.
|Continuous assessment||Partial exams||General exam|
- Two take-home group assignments (up to 4 students), worth 70 per cent of total marks. The take-home are aimed at providing a solution to economic policy problems currently discussed within the EU and require the use of ‘real’ data provided by the course instructors or available on the EU websites.
- A final written exam (open book – open questions) makes up for the remaining points.
- Individual essay (including an analysis of data), on a topic to be agreed in advance, on one of the parts of the course, worth 50 per cent of total marks.
- A final written exam makes up for the remaining points.
- D. ACEMOGLU, P. AGHION, F. ZILIBOTTI, Distance to Frontier, Selection and Economic Growth, Journal of the European Economic Association, 4:37-74, 2006.
- C. ALTOMONTE, L. BONACORSI, I. COLANTONE, Trade and Growth in the Age of Global Value Chains, mimeo.
- L. ANSELIN, Local Indicators of spatial association – LISA, Geographical Analysis, 1995, 27(2): 93-115.
- L. ANSELIN, GeoDa: an introduction to spatial data analysis, Geographical Analysis, 2006, 38(1):5-22.
- S. GIBBONS, H. OVERMAN, Mostly pointless spatial econometrics?, Journal of Regional Science, 2012, 52(2): 172–191.
- M. GIUA, Spatial discontinuity for the impact assessment of the EU Regional policy. The case of the Italian Objective 1 regions, Journal of Regional Science, forthcoming, 2016.
- P. KRUGMAN, Scale Economies, Product Differentiation and the Pattern of Trade, The American Economic Review, 70:950-959, 1980.
- M. MELITZ, The Impact of Trade on Intra-Industry Reallocation and Aggregate Industry Productivity, Econometrica, 71:1695-1725, 2003.
- M. MELITZ, G. OTTAVIANO, Market Size, Trade, and Productivity, Review of Economic Studies, 75: 295-316, 2008.
- PIENKOWSKI, BERKOWITZ, Econometric assessments of Cohesion Policy growth effects: how to make them more relevant for policy makers?, European Commession DG Regio WP 2/2015, 2015.
- Class notes explaining in detail the more technical articles and additional readings are provided when dealing with each specific topic covered in the programme on the Learning Space of the course.