ECTS : 3
Description du contenu de l'enseignement :
The course covers the recent advances in international trade and macroeconomics with an emphasis on the role of firm heterogeneity. Starting from recent models of international trade with heterogeneous firms (Melitz 2003; Chaney 2008) and its effects on the labor market, the course will rely on the theoretical modelling of the New Open Economy Macroeconomy framework (Obstfeld & Rogoff, 1995), which embeds explicit microfoundations in a dynamic general equilibrium perspective. The first part of the course will provide students with the essential tools to study the optimal international strategy of firms with different levels of productivity. The second part of the course studies the recent advances in international macroeconomics that incorporate these elements from the international trade literature, by modeling the role of the extensive margin of trade à la Melitz (2003) in an international macroeconomic setting.
Compétence à acquérir :
The objective of the course is to introduce some key topics of interest in the field of international trade and international macroeconomics and to provide students with the modelling framework to address them. A specific focus will be made on the role of firm heterogeneity in shaping international trade flows as well as macroeconomic fluctuations in an international set-up. The students will be trained to read leading research articles on these issues. After attending the classes, the students will have a sharp understanding of the optimal international strategy of firms, and how such trade microfoundations shed new light on long-standing or novel questions in international macroeconomics. They will also master the cutting-edge research at the frontier between international macroeconomics and international trade, and how to think about economic policy in this global framework.
Mode de contrôle des connaissances :
Final exam: 60%
Home assignment: 40%
Bibliographie, lectures recommandées :
There is no textbook for this course. We will base entirely on published academic papers, based on the (yet non-definitive) list of papers.
Common core paper - compulsory reading
· Melitz, M. (2003) “The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity”, Econometrica 71: 1695-1725
Part I: International trade
· Brainard, S.L. (1997) “An Empirical Assessment of the Proximity- Concentration Trade-off Between Multinational Sales and Trade,” American Economic Review, 87(4), pages 520-544 (suggested reading)
· Melitz, M., Helpman, H. and S. Yeaple (2004) “Export Versus FDI with Heterogeneous Firms”, American Economic Review 94: 300-316 (compulsory reading).
· Pavcnik (2002) “Trade Liberalization, Exit, and Productivity Improvements: Evidence from Chilean Plants”, The Review of Economic Studies 69, January 2002, pp. 245-76 (suggested reading).
· Trefler D. (2004) “The Long and Short of the Canada-U.S. Free Trade Agreement”, American Economic Review 94: 870-895 (compulsory reading).
· Helpman H. and Itskhoki (2010) “Labour Market Rigidities, Trade and Unemployment”, Review of Economic Studies, 77(3): 1100-1137 (compulsory reading).
· Kovak, B. (2013) “Regional Effects of Trade Reform: What is the Correct Measure of Liberalization”, American Economic Review, 103(5): 1960-1976 (compulsory reading).
· Autor D., Dorn D., and G. Hanson (2013) “The China Syndrome: Local Labor Market Effects of Import Competition in the United States”, American Economic Review, 2013, 103(6), 2121–2168 (compulsory reading).
· Kovak, B and R. Dix-Carneiro (2017) “Trade Liberalization and Regional Dynamics”, American Economic Review, 107(10): 1908-2946 (suggested reading).
Part II: International Macroeconomics
Trade, trade integration and international macroeconomics
· Backus, David K.; Kehoe, Patrick J.; Kydland, Finn E. (1995), "International Business Cycles: Theory and Evidence", in Cooley, Tom (ed.), Frontiers of Business Cycle Research, Princeton University Press
· Ghironi, Fabio, and Marc Melitz. 2005. “International Trade and Macroeconomic Dynamics with Heterogeneous Firms.” Quarterly Journal of Economics 120: 865-915
Firm heterogeneity, firm dynamics and international fluctuations
· Barratieri, Alessandro, Cacciatore, Matteo, Ghironi, Fabio; « Protectionism and the business cycle », Journal of International Economics, vol. 129, 2021, p. 1-21
· Monetary policy, firm heterogeneity, and product variety, Hamano, Masashige and Zanetti, Francesco, European Economic Review, Vol. 104, 2022
· Cacciatore M., Ghironi F., “Trade, unemployment, and monetary policy”, Journal of International Economics, 2021
Trade, granularity and business cycles
· The Micro Origins of International Business-Cycle Comovement, Julian di Giovanni, Andrei A. Levchenko and Isabelle Mejean, American Economic Review, Vol 108, 2018
· Large Firms and International Business Cycle Comovement, 2017, American Economic Review P&P, 107(5):598-602, J. di Giovanni, A. Levchenko and I. Méjean
· Volatility in the small and in the large: The lack of diversification in international trade, Francis Kramarz, Julien Martin and Isabelle Méjean, Journal of International Economics, Volume 122, January 2020
The macro consequences of economic