Advanced International Trade: Theory and Evidence

Advanced International Trade: Theory and Evidence

Advanced International Trade: Theory and Evidence

Advanced International Trade: Theory and Evidence

Synopsis


Advanced International Trade is the first major graduate textbook in international trade in a generation. Trade is a cornerstone concept in economics, taught in all departments both in the United States and abroad. The past twenty years have seen a number of new theoretical approaches that are essential to any graduate international trade course, and will be of interest in development economics and other fields. Here, Robert Feenstra steps beyond theory to consider empirical evidence as well. He covers all the basic material including the Ricardian and Hecksher-Ohlin models, extension to many goods and factors, and the role of tariffs, quotas, and other trade policies; recent material including imperfect competition, outsourcing, political economy, multinationals, and endogenous growth; and new material including the gravity equation and the organization of the firm in international trade.


Throughout the book, special emphasis is placed on integrating the theoretical models with empirical evidence, and this is supplemented by theoretical and empirical exercises that appear with each chapter. Advanced International Trade is intended to bring readers to the forefront of knowledge in international trade and prepare them to undertake their own research. Both graduate students and faculty will find a wealth of topics that have previously only been covered in journal articles, and are dealt with here in a common and simple notation. In addition to known results, the book includes some particularly important unpublished results by various authors. Two appendices describe empirical methods applicable to research problems in international trade, methods that draw on (i) index numbers and (ii) discrete choice models. Thoroughly up-to-date and marked by clear, straightforward prose, this book will be used widely--and enthusiastically.

Excerpt

This Book is intended for a graduate course in international trade. I assume that all readers have completed graduate courses in microeconomics and econometrics. My goal is to bring the reader from that common point up to the most recent research in international trade, in both theory and empirical work. This is not intended to be a difficult book, and the mathematics used should be accessible to any graduate student. The material covered will give the reader the skills needed to understand the latest articles and working papers in the field.

At the same time, I am aware that many readers will become teachers in the field, especially at the undergraduate level. I feel that it is suitable, then, to start most chapters by introducing simple graphical techniques that can be used in teaching. Following this, I move towards the equations for each model. A set of problems at the end of each chapter gives the reader some experience in manipulating these equations. An instructor's manual that accompanies this book provides solutions to the problems. In addition, I have included empirical exercises that replicate the results in some chapters. Completing all of these could be the topic for a second course, but even in a first course there will be a payoff to trying some exercises. The data and programs for these can be found on my home page and also at the website www.internationaldata.org.

A word on notation. I consistently use subscripts to refer to goods or factors, whereas superscripts refer to consumers or countries. In general, then, subscripts refer to commodities and superscripts refer to agents. The index used (h, i, j, k, l, m, or n) will depend on the context. The symbol c is used for both costs and consumption, though in some chapters I instead use d(p) for consumption to avoid confusion. The output of firms is consistently denoted by y and exports are denoted by x. Uppercase letters are used in some cases to denote vectors or matrixes, and in other cases to denote the number of goods (N), factors (M), households (H), or countries (C), and sporadically elsewhere. The symbols α and β are used generically for intercept and slope coefficients, including fixed and marginal labor costs.

The contents of several chapters included here have been previously published. Chapters 4 and 5 are revisions from articles appearing in

Faculty wishing to obtain the instructor's manual should contact Princeton University Press.

The programs for the empirical exercises are provided in STATA. Readers not familiar with
STATA are encouraged to complete the web course developed by James Levinsohn and
available at www.psc.isr.umich.edu/saproject.

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