Firm Dynamics in International Trade

Professor: Jeff Thurk // jeff.thurk@uga.edu

Meetings: TBD

Office Hours: TBD

Semester Schedule

Note: An “*” indicates we will cover that paper in class.

Lecture Slides: Lecture Slides

Topic 1: Aggregate Trade Models and Gravity

Literature:
Armington (1969) "A Theory of Demand for Products Distinguished by Place of Production" IMF Staff Papers
Bergstrand (1985). “The Gravity Equation in International Trade: Some Microeconomic Foundations and Empirical Evidence.” Review of Economics and Statistics.
Bergstrand (1989). “The Generalized Gravity Equation, Monopolistic Competition, and the Factor-Proportions Theory in International Trade.” Review of Economics and Statistics. *McCallum (1995) "National Borders Matter: Canada-U.S. Regional Trade Patterns" American Economic Review
*Anderson and Van Wincoop (2003) "Gravity with Gravitas" American Economic Review.
*Bernard, Jensen, Redding, and Schott (2007). “Firms in International Trade.” Journal of Economic Perspectives.
Kehoe and Kehoe (1994) "A Primer on Static Applied General Equilibrium Models" Federal Reserve Bank of Minneapolis Quarterly Review

Topic 2: Countries Don't Trade, Firms Do

Literature:
Krugman (1980) "Scale Economies, Product Differentiation, and the Pattern of Trade" American Economic Review.
*Roberts and Tybout (1997), "The Decision to Export in Colombia: An Empirical Model of Entry with Sunk Costs" American Economic Review.
Eaton, Kortum, and Kramarz (2008) "An Anatomy of International Trade: Evidence from French Firms" NBER Working Paper 14610.
*Melitz (2003) "The Impact of Trade on Intra-industry Reallocations and Aggregate Industry Productivity" Econometrica.
Chaney (2008) "Distorted Gravity" American Economic Review.

Topic 3: The Ricardian Model of Trade --- Theory

Literature:
Dornbusch, Fischer, Samuelson (1977) "Comparative advantage, trade, and payments in a Ricardian model with a continuum of goods'' The American Economic Review.
*Eaton and Kortum (2002) "Technology, Geography, and Trade'' Econometrica.
Alvarez and Lucas (2007) "General equilibrium analysis of the Eaton-Kortum model of international trade'', Journal of Monetary Economics.
Roy (1951) "Some thoughts on the distribution of earnings'', Oxford Economic Papers.
Heckman and Honore (1990), "The empirical content of the Roy model'', Econometrica.
Lagakos and Waugh (2010), "Specialization, Economic Development, and Aggregate Productivity Differences''

Topic 4: The Ricardian Model of Trade --- Empirical

Literature:
*Hummels and Skiba (2004) “Shipping the Good Apples Out.” Journal of Political Economy.
*Waugh (2010) "International Trade and Income Differences'' American Economic Review. Paper Summary: Cary
*Fieler (2010) "Non-Homotheticity and Bilateral Trade: Evidence and a Quantitative Explanation'' Econometrica.
Simonovska and Waugh (2014) "Elasticity of Trade: Estimates and Evidence'' Journal of International Economics.
Donaldson (2017) "Railroads of the Raj: Estimating the Impact of Transportation Infrastructure'' American Economic Review.
*Dickstein and Morales (2016). “What do Exporters Know?” Quarterly Journal of Economics.

Topic 5: The Extensive Margin

Literature:
Feenstra (1994) "New Product Varieties and the Measurement of International Prices" American Economic Review.
Kehoe and Ruhl (2009), "How Important is the New Goods Margin in International Trade?" Journal of Political Economy.
*Hummels and Klenow (2005), "The Variety and Quality of a Nation's Exports" American Economic Review.
*Broda and Weinstein (2006) "Globalization and the Gains from Variety" Quarterly Journal of Economics.
Chaudhuri, Goldberg, and Jia (2006). “Estimating the Effects of Global Patent Protection in Pharmaceuticals: A Case Study of Quinolones in India.” American Economic Review.

Topic 6: Using Models to Understand Data

Literature:
*Arkolakis, Costinot, Rodriquez-Clare (2010) "New Trade Models, Same Old Gains?'' American Economic Review.
Frankel and Romer (1999) "Does Trade Cause Growth?'', American Economic Review.
Feyrer (2010), "Trade and Income -- Exploiting Time Series in Geography''.
*Feyrer (2010), "Distance, Trade, and Income -- The 1967 to 1975 Closing of the Suez Canal as a Natural Experiment''.
*Atkenson and Burstein (2010) “Innovation, Firm Dynamics and Trade” Journal of Political Economy.
*Barjamovic, Chaney, Cosar, and Hortascu (2019) “Trade, Merchants, and the Lost Cities of the Bronze Age.” Quarterly Journal of Economics.
*Mrazova, Neary, and Parenti (2020) "Sales and Markup Dispersion: Theory and Empirics." Manuscript.

Topic 7: Trade Barriers and Trade Liberalization

Literature:
Feenstra (1988). “Quality Change Under Trade Restraints in Japanese Autos.” The Quarterly Journal of Economics.
Berry, Levinsohn, and Pakes (1999). “Voluntary Export Restraints on Automobiles: Evaluating a Trade Policy.” American Economic Review.
*Fajgelbaum, Grossman, and Helpman (2011). “Income Distribution, Product Quality, and International Trade.” Journal of Political Economy.
Holmes, McGratten, and Prescott (2015). “Quid Pro Quo: Technology Capital Transfers for Market Access in China.” Review of Economic Studies.
*DeLoecker, Goldberg, Khandelwal, and Pavcnik. (2016). “Prices, Markups and Trade Reform.” Econometrica.
Fajgelbaum, Goldberg, Kennedy, and Khandelwal (2019) “The Return to Protectionism.” The Quarterly Journal of Economics.
*Caliendo, Dvorkin, and Parro (2019). “Trade and Labor Market Dynamics: General Equilibrium Analysis of the China Trade Shock.” Econometrica.
*Pierce and Schott (2020). “Trade Liberalization and Mortality: Evidence from U.S. Counties.” American Economic Review.
Flaaen, Hortacsu, and Tintelnot (2020) “The Production Relocation and Price Effects of U.S. Trade Policy: The Case of Washing Machines.” American Economic Review.

Topic 8: Measuring Mis-allocation

Literature:
*Hsieh and Klenow (2009). “Misallocation and Manufacturing TFP in China and India.” Quarterly Journal of Economics.
*Olley and Pakes (1996). “The Dynamics of Productivity in the Telecommunications Equipment Industry. Econometrica.
*Gandhi, Navarro, and Rivers (2016). “On the Identification of Production Functions: How Heterogenous is Productivity?” Manuscript
Ackerberg, Caves, and Frazer (2015). “Identification Properties of Recent Production Function Estimators.” Econometrica.
*Asker, Collard-Wexler, and De Loecker (2014) “Dynamic Inputs and Resource (Mis)Allocation.” Journal of Political Economy.

Topic 9: Trade as a Determinant of Firm Investment and Innovation

Literature:
Ghironi and Melitz (2005) "International Trade and Macroeconomic Dynamics with Heterogeneous Firms" Quarterly Journal of Economics.
Alessandria and Choi (2007) "Do Sunk Costs of Exporting Matter for Net Export Dynamics?" Quarterly Journal of Economics.
Ruhl (2008) "The International Elasticity Puzzle." Manuscript.
*Arkolakis (2010). “Market Penetration Costs and the New Consumers Margin in International Trade.” Journal of Political Economy.
*Aw, Roberts, and Xu (2011). “R&D Investment, Exporting, and Productivity Dynamics.” American Economic Review.
Ruhl and Willis (2017). “New Exporter Dynamics.” International Economic Review.