Instructor: Giorgia Giovannetti
The objective of this course is to provide students with thorough understanding on international trade theory including recent developments and help understand specific features of the current wave of globalization as well as countries' and firms' reactions to it.
Lectures will focus on key topics that are at the center of the policy debate: why do countries open to trade? What are the effects of free trade on the process of economic development and inequality? Why do countries restrict the exchange of goods, and what can we say about the effects of protectionism on trade and welfare?
At the end of the course, students are expected to have a good knowledge of the mechanisms and predictions from the traditional models of trade, and from the New Trade Theory.
The first part of the course, after an introduction on how to measure globalization, also accounting for the value added in each country, gives an overview of the main theories in international trade and analyses historical trends in integration (trade, capital, people, ideas). It also highlights the role of China and India in the global economy. The second part of the course covers gravity equations as a tool for analysing trade integration, and economic geography that has been an important component of recent international economic analysis. It also illustrates new issues raised by the globalization process, such as offshoring, outsourcing, and the theories recently developed to address them ('new new' trade theories) and emphasises the role of imported inputs for the competitiveness of a country. Key topics include: globalization: useful definitions; statistical and economic indicators of globalization, specialization, imbalances; Ricardo's model of International Trade (brief); Hescker-Olin model; Imperfect competition models; geography models; New theory versus New New theory (Melitz); Movements of capital and workers; Offshoring and outsourcing; FDI and multinational. Other topics (where lectures will also be accompanied by students’ presentations) cover Global Value Chains, R&D internationalization; Migrations; Trade policies and International agreements.