25751 - International Economics

Learning outcomes

This course is intended to analyze the regulatory framework for trade and the regulatory issues relating to international markets and regional markets, such as U.S. and EU markets, and emerging markets in Africa and Asia. The students acquires knowledge: - about Institutional structures (GATT/WTO, NAFTA, EU, APEC, SADEC, CEDEAO) and Regulatory authorities; - about International dimensions of market regulation (tariffs and customs regulations, product safety and environmental restrictions, trademark and patent regulations); - about disputes settlement.

Course contents

1) Multinational firms and foreign direct investments: evidence on multinational enterprises (MNEs) and foreign direct investments (FDIs); taxonomy of the FDIs (horizontal vs. vertical, greenfield vs. brownfield); motives for horizontal FDIs (the proximity-concentration trade-off); implications of vertical FDIs (high-skilled vs. low-skilled workers; raising or declining inequality); drivers of the firm choice between greenfield investments and cross-border M&As.

2) Global value chains (intro): international fragmentation of production and definition of global value chains (GVCs); GVCs measurement through the world input-output tables; countries and industries involvement in GVC activities (backward and forward participation); relation-specificity and the relational nature of the global production network.

3) Firm strategies in global value chains (part I): firm-level decision to participate in GVCs ; differences between the decisions of backward and forward participation; global sourcing strategies and choice of the optimal sourcing country; two-sided matching.

Firm strategies in global value chains (part II): the lead firm problem about the optimal location for every stage of production; optimal organizational structure of a GVC; trade-off between vertical integration and outsourcing and the optimal assignment of organizational forms to production stages; country-level characteristics (e.g. institutional features) and GVC organization.

4) International prices and exchange rates: the real exchange rate as the relative price of goods across countries; nominal vs. real exchange rates and relative evidence; retail and border price setting; pricing-to-market strategy and exchange rate pass-through incompleteness; models with variable markups.

Readings/Bibliography

(1) Primary: Slides

 

(2) Other readings:

• Antras, Pol, and Davin Chor (2021): “Global Value Chains”. [https://scholar.harvard.edu/files/antras/files/antras_chor_gvc_chapter_long_version.pdf]

• Antràs, Pol, and Stephen Yeaple (2014): “Multinational Firms and the Structure of International Trade”, Handbook of International Economics, 4th ed., 55-130. [https://scholar.harvard.edu/antras/publications/multinational-firms-and-structure-international-trade]
  
  
• Burstein, Ariel, and Gita Gopinath (2014): “International Prices and Exchange Rates”, Handbook of International Economics, 4th ed.,391-451.[https://scholar.harvard.edu/files/gopinath/files/prices_oct20_2015.pdf]
  
  

Slides and lecture notes will be provided by the instructor, uploading a PDF version of these files on the course’s webpage at https://virtuale.unibo.it in advance with respect to the beginning of the classes.

Class participation is highly recommended in order to successfully understand the course content.

 

 

NOTE: before attending the course, students who lack a prior backgound in international trade are strongly invited to have a look at chapters 2, 4 and 6 in R. C. Feenstra - A. M. Taylor, International Macroeconomics, 4th edition, Worth Publishers, 2017.

An excerpt of these chapters will be viable at the course’ s webpage at https://virtuale.unibo.it.

Basic notions from chapters 2,4 and 6 will be all taken for granted throughout the course.

 

Teaching methods

The course will be taught using a traditional format (frontal lectures) yet leaving room for students’ participation, in form of classroom discussions. Teamwork in form of group assignments will be used to stimulate cooperation and debate among students.

Assessment methods

Final written exam, with both open-ended questions and multiple choice questions, plus the evaluation of a teamwork consisting in a short essay based on a list of selected papers referring to topics discussed in class. Groups will be formed ensuring a balanced composition, as regard to students’ background, gender and country of origin.

Up to 10 points out of 30 of the total final grade (i.e., one third) will be appointed based on the quality of the essay, the contribution of each member to the teamwork (to be clearly outlined) and individual in-class participation. Peer-to-peer evaluation might also be requested, albeit for a max of 2 points (hence, to an extent lesser than 10% over the final grade, in thirtieths).

In the essay, students have to make sure to specify any reference: plagiarism will not be tolerated. Additional instructions and the list of readings will be given in class.

The written final exam will instead be worth 20 points max, and a mock version will be uploaded online, at the course’s webpage at https://virtuale.unibo.it [https://virtuale.unibo.ito/] at the beginning of the course.

 

Additional exam rules

Students are required to register for the exam by using the online application procedure.

Students can refuse a passing mark but only once. Each mark higher than 18/30 will automatically be registered by the instructor after the student’s second attempt.

Participants will not be granted the possibility to integrate/substitute marks with oral examinations.

For students who are authorized by the Degree Course Board to register for the exam without attending the lectures, the final exam will consist of a written exam with only multiple-choice and open-ended questions. The same applies to students who retake the exam upon rejecting a positive mark from a previous attempt.

Teaching tools

A Moodle platform [https://virtuale.unibo.it/] will be used to upload and share notes, additional teaching materials and readings.

Students not attending in person will be given the opportunity to attend this course online, on Teams, due to the restrictions in place because of the Covid-19 pandemic.

 

Orario di ricevimento

By appointment, prior communication via email at stefano.bolatto@unibo.it

 

Office hours

See the website of Stefano Antonio Bolatto