B2206 - INTERNATIONAL ECONOMICS AND TRADE

Learning outcomes

The course aims at helping students navigate the realities of the global economy. The course will emphasize blending theory and data with real-world policies, events, and evidence. The course will discuss patterns of trade, the gains and losses from liberalizing or restricting trade, and the role of increasing returns. At the end of the course the student will be expected to become familiar with policy relevant questions concerning migrations, income distribution, multinational enterprises and ‘North-south’ issues. Protectionism, trade and the environment and the role of international institutions and agreements (the EU, the World Trade Organization (WTO)) will also be discussed.

Course contents

The course is structured in three main pillars:

1. Formal Trade Theory
   A rigorous introduction to international trade theory, from classical models (Ricardo, Heckscher-Ohlin) to increasing returns and firm heterogeneity models (Krugman, Melitz). Theoretical frameworks will be developed using formal tools from general equilibrium theory and microeconomics.
2. Empirical Trade Analysis with Microdata
   Students will work hands-on with real-world trade and firm-level datasets. Topics include estimating productivity, constructing trade flows, analyzing the impact of trade policies and tariffs, and understanding exporter heterogeneity. This part of the course aims to develop skills highly demanded by institutions such as the ECB, OECD, World Bank, and national ministries.
3. Research in Practice
   The course integrates material from real consulting assignments and policy briefs authored for international organizations or national governments (e.g., United Nations, Ministry of Economy and Finance). Students will read, discuss, and present recent academic and policy-oriented papers, simulating the workflow of applied researchers in policy environments.

Readings/Bibliography

• Feenstra, R. (2016). Advanced International Trade: Theory and Evidence, 2nd Edition, Princeton University Press.
• Helpman, E. (2011). Understanding Global Trade, Harvard University Press.

• Krugman, P., Obstfeld, M., and Melitz, M. (2022). International Economics: Theory and Policy, 12th Edition, Pearson.
  

Important: Earlier editions of all textbooks are also acceptable.

• Additional readings (academic papers, policy briefs, and data assignments) will be provided during the course.

Teaching methods

The course combines lectures with seminar-style discussions and group activities. Students will work in teams to analyze real-world trade issues, present recent academic papers, or write short policy memos based on empirical data or institutional case studies. Class sessions will alternate between theoretical exposition, hands-on data applications, and critical debate on current trade and globalization challenges.

Assessment methods

The final grade will be based on:

• Group project (50%): either a paper presentation or a short policy memo addressing a real trade or globalization issue, developed and presented by student teams.
• Final written exam (50%): with theoretical and applied questions.

Grading scale:
<18: Insufficient
18–23: Sufficient
24–27: Average/Good
28–29: Very Good
30: Excellent
30 cum laude: Outstanding

Teaching tools

Lecture slides, datasets, policy readings, and supporting material will be made available through the university platform (e.g., Virtuale or Moodle). Statistical software (such as STATA or R) will be used in data-oriented sessions.

Office hours

See the website of Tommaso Sonno