Foto: Matthias Friel
Empirical research in international economics is characterized by a tight link between economic theory and econometric specifications. The course will introduce the structural approach to empirical research using the gravity model of international trade, which is the workhorse model in empirical trade research. Based on a theoretical derivation of the model, students will learn both how to estimate the corresponding structural econometric model and how to use the model to perform counterfactual policy analyses. Using the trade gravity expression as a starting point, closely related models for example for international migration, FDI flows, or carbon emissions embodied in international trade will also be considered. The course will furthermore introduce a dynamic multicountry model of international trade, production, and investment, discuss its calibration, and show how it can be used to assess a range of questions in international macroeconomics. Besides the lectures, the course will also contain computer sessions in which the students will implement the different estimations and simulations themselves.
- Yotov, Y. V., R. Piermartini, J.-A. Monteiro, and M. Larch (2016): "An Advanced Guide to Trade Policy Analysis: The Structural Gravity Model," World Trade Organization, Geneva. - Obstfeld, M. and K. Rogoff (2001): "The Six Major Puzzles in International Macroeconomics: Is There a Common Cause?", In: NBER Macroeconomics Annual 2000, vol. 15. MIT Press, pp. 339–390. - Eaton, J., S. Kortum, and B. Neiman (2016): "Obstfeld and Rogoff׳s International Macro Puzzles: A Quantitative Assessment", Journal of Economic Dynamics and Control, 72, pp. 5-23.
Further reading will be provided in the lectures and the moodle course.
One presentation plus one term paper
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