78360 - International Trade in Services

Academic Year 2023/2024

  • Moduli: Stefano Antonio Bolatto (Modulo 1) Giovanni Prarolo (Modulo 2)
  • Teaching Mode: Traditional lectures (Modulo 1) Traditional lectures (Modulo 2)
  • Campus: Rimini
  • Corso: First cycle degree programme (L) in Economics of Tourism (cod. 8847)

Learning outcomes

The course aims to build knowledge and understanding in the area of international trade, particularly focusing on the service sector. To the end the course will provide an understanding of the intellectual and practical problems that arise from the economic interaction between countries and offer explanations of the international pattern of trade and specialisation.

Course contents

Module 1. The first part of the course focuses on international trade theory and policy. It addresses some of the classic questions of international trade theory such as: who trades what with whom? What are the effects of trade on welfare and the income distribution? How micro-aspects enter the picture of international trade? The course presents the answers of classical and new trade theory to these questions. The first part ends with an overview of recent theoretical and empirical research studies on the role of heterogeneous firms in international trade.

Main topics:

  • The Ricardian model
  • The specific factors model
  • The Heckscher-Ohlin model
  • The standard trade model
  • External economies of scale and agglomeration
  • Internal economies of scale, FDI and multinational firms

Module 2. The second half of the course will analyze a selection of topics in the field of spatial economics, shedding light on the centripetal and centrifugal forces shaping the geographical structure of the economy. In particular, the first classes will focus on the drivers of the optimal location of manufacturing and service industries over space, in the presence of transportation costs, economies of scale and workers’ mobility. Building on these insights, the remaining lectures will explore the most relevant implications for the matter of urban location, addressing questions such as: When and how do new cities form? Why do cities of different size coexist? How does variation in transport costs (either natural or artificial) affect urban location?

Main topics:

Part I. Labor Mobility and Regional Development

  • Monopolistic competition and its spatial implications

· Core-periphery models and their extensions (multiple regions, continuous space)

Part II. The Urban System

  • Spatial models of urban systems
  • The monocentric economy
  • The emergence of new cities
  • Evolution of a hierarchical urban system
  • Ports, transportation hubs, and city location


Module 1: Krugman, P., M. Obstfeld and M. Melitz: "International Economics: Theory and Policy", 11th edition, Pearson Eds.

Module 2: Fujita, M., Krugman, P., and A. Venables: "The Spatial Economy: Cities, Regions, and International Trade", MIT press.

Additional material will be distributed in class, or uploaded on the web page of this course on Moodle (http://virtuale.unibo.it [http://virtuale.unibo.it/] )

Teaching methods

Traditional lectures, homeworks (e.g. production of short essays based on relevant economic facts or scholarly writings), classworks (e.g. presentations given by small groups of students).

Assessment methods

Written exam, with the option to take two midterms, relative to Module 1 and Module 2, respectively.

The exam for Module 1 may include multiple choice questions and short open-ended questions. Part of the evaluation is also based on classworks and homeworks.

The exam for Module 2 will be open-book, and will integrate the evaluation that students will receive for Module 1. For attending students, part of the evaluation relative to Module 2 is based on in-class participation. A 70% attendance ratio is requested, to qualify for this option.

For non-attending students, the exam for Module 2 will instead consist of a (closed-book) short written essay, plus multiple choice questions.

Teaching tools

All teaching materials will be uploaded on the course page on the Moodle platform (www.virtuale.unibo.it [http://virtuale.unibo.it/])

Office hours

See the website of Giovanni Prarolo

See the website of Stefano Antonio Bolatto


No poverty Decent work and economic growth Reduced inequalities Sustainable cities

This teaching activity contributes to the achievement of the Sustainable Development Goals of the UN 2030 Agenda.