Course 2017-2018 a.y.



Department of Economics

Course taught in English

Go to class group/s: 31
CLMG (6 credits - I sem. - OP  |  SECS-P/01) - M (6 credits - I sem. - OP  |  SECS-P/01) - IM (6 credits - I sem. - OP  |  SECS-P/01) - MM (6 credits - I sem. - OP  |  SECS-P/01) - AFC (6 credits - I sem. - OP  |  SECS-P/01) - CLEFIN-FINANCE (6 credits - I sem. - OP  |  SECS-P/01) - CLELI (6 credits - I sem. - OP  |  SECS-P/01) - ACME (6 credits - I sem. - OP  |  SECS-P/01) - DES-ESS (6 credits - I sem. - OP  |  SECS-P/01) - EMIT (6 credits - I sem. - OP  |  SECS-P/01) - GIO (6 credits - I sem. - OP  |  SECS-P/01)
Course Director:

Classes: 31 (I sem.)

Course Objectives

International trade has been one of the most productive research areas in Economics over the last 30 years. This course aims to give you an overview of the workhorse models and to enable you to understand frontier research in this area. The focus is mainly on theory, but empirical work also is covered.
The course is divided into an introduction and two main parts.
The introduction consists of a short history of international trade since the Industrial Revolution and some methodological preparations.
The first part covers a modern version of the classical theories about why and how countries trade, due to Ricardo, Heckscher-Ohlin and the New Trade Theory of the 1980s.
The second part covers several modern topics: the role of firm heterogeneity for international trade, the theory of multinational firms and offshoring, and the role of trade for income inequality.

Course Content Summary

  • The history of International Trade since the Industrial Revolution.
  • Methodological preparations: General Equilibrium models with many goods.
Classical trade theory.
  • Ricardian Trade Theory.
  • Heckscher-Ohlin Trade Theory.
  • Economies of Scale and "New Trade Theory".
Modern questions.
  • Firm Heterogeneity and Trade.
  • Multinational firms and Offshoring.
  • Trade and Inequality.

Detailed Description of Assessment Methods

Assessment for this course is based on problem sets and on a final exam.
Problem sets are graded on a pass/fail basis and count for 20% of the final grade, if and only if the problem set grade is higher than the final exam grade. If it is not, the final exam grade is also the grade for the course.
  • Problem sets. There are between five and six problem sets, which you have to complete within roughly two weeks. You can work in groups of up to three students. The solutions to the problem sets are discussed in a special session with the Teaching Assistant.
  • Final exam, made up of two parts. The first part is made up of short questions on the material covered during the lectures, the second part is an exercise similar to the ones of the problem sets.


Lecture notes and the list of references for each topic covered by the course outline are posted on e-learning and on my website ( throughout the course.

There is no textbook. However, two books may be useful to you if you want more information, or a different perspective on the main subjects.
  • R. FEENSTRA, Advanced International Trade: Theory and Evidence, Princeton University Press, 2016.
  • E. HELPMAN, Understanding Global Trade, Harvard University press, 2011, (this book is not as formal as Feenstra's, but can be useful to get further intuition).
Exam textbooks & Online Articles (check availability at the Library)


This is an advanced class, in which students spend substantial time solving formal economic models.

Therefore is strongly recommended that students have attended the first-year Economics and Social Sciences Master course in Advanced Mathematics for Economics and Social Sciences (cod. 20136) and in Econometrics (cod. 20203) or equivalent courses at other universities. Furthermore, students need to have taken at least one undergraduate course in microeconomics.

Students can get an idea on the level of the course by looking at last year's lecture notes, posted on my website (

Last change 31/05/2017 14:11