Course goals

Master frontier models. Like other fields, international economics uses heterogeneous-agent (firms, typically) models. Let's learn how to build, solve, and parameterize the types of models used in research.

Learn about the data. We will use both firm-level data and aggregate data that relates to international topics. We will pick up the jargon (e.g., terms of trade, free on board, real exchange rate) as we go.

Get a start on research. Our most important goal. The exposure to questions, models, and data is meant to get you thinking about what interests you and where you can make an contribution.

Course content

Reading: The papers listed below are "required" reading. You should give them a look before class. Many topics also have notes from me. There is an extended Reading list that provides more papers related to the topics we will cover in class and papers related to topics that we will not cover in class.

Seminars: You are expected to attend the UW international workshop. This fall, there are three workshops, rather than weekly seminars. The workshop dates are September 9, October 28, and November 11. You can find the details for the workshops on the department's events webpage.

Deliverables

Research writeups: Each week, you will write a short summary of a paper's main question and answer. You can typically do this by reading just the introduction and skimming the paper. The goal here is to get thinking about ideas—ideas that might lead to your own research. See what your classmates are reading.

Presentations: Presenting your work is an important skill to practice. The short presentations are of a paper from the literature. The goal is to practice distilling a paper down to its essentials. The long presentation can be either your own work or a critique of a paper from the literature.

Problem sets: Problem sets have been deprecated for 2022. I will still post a few problem sets, but they are optional. I encourage you to work on them with your classmates and learn as much as you can, but I do not want them to take away from you getting started on your own research.

Weekly schedule

This schedule is a work in progress. We will adjust dates (and topics) as needed.

Week 0: September 7
Introduction // Motivating questions
Introduction to trade data

Reading: Syllabus
Notes: Data and prices
Slides: Introduction // Census data
Code/Data: data_exploration.ipynb // 2013-2021-hs02.h5 // country.dta

Week 1: September 12 & 14
Gravity // Ricardian models

Reading: Anderson and van Wincoop (2003) // Eaton and Kortum (2002)
Notes: Gravity // Ricardo
Code/Data: frechet.ipynb [view online]

Week 2: September 19 & 21
Ricardian models
The CES-monopolistic competition model (static)

Reading: Melitz (2003)
Notes: CES // Melitz

Week 3: September 26 & 28
The CES-monopolistic competition model (static)
Firm-level facts

Reading:
Section 2 of Alessandria, Arkolakis, and Ruhl (2021)
Notes:
Slides: Firm level data facts
Code/Data: firm-level-data.ipynb // EAM_1992_2017_FINAL.dta

Week 4: October 3 & 5 // No in-class meeting October 3
Dynamic discrete-choice exporting models (the sunk cost model)
Solving discrete-choice exporting models // Value/policy function iteration

Reading: Das, Roberts, and Tybout (2007) // Alessandria, Arkolakis, and Ruhl (2021)
Notes:
Slides: Sunk-cost model // VFI // Das, Roberts, Tybout (2007)

Week 5: October 10 & 12
Solving discrete-choice exporting models, continued
Estimating discrete-choice exporting models

Reading: Skim: Ruhl and Willis (2017)
Slides: Measuring trade costs // Ruhl and Willis (2007) // Alessandria, Choi, and Ruhl (2021)

Week 6: October 17 & 19
Application: Inventories and supply chains

Reading: Alessandria, Kaboski, and Midrigan (2010), Skim: AKKMR (2022)
Notes: Inventories
Slides: Inventory facts // AKKMR (2022)
Code: eoq.ipynb

Week 7: October 24 & 26
Short presentations
Short presentation details // Some ideas on the reading list
M: Liu, Hu, Lord Medrano // W: X. Li, Mcketty, Yun

Reading: None
Notes: Short presentations

Week 8: October 31 & November 2
Short presentation: (M) Yoon, S. Li, Minoer
Policy Uncertainty

Reading: Handley (2014) // Pierce and Schott (2012) // AKKRS (2022)
Notes: Policy uncertainty
Slides: AKKRS

Week 9: November 7 & 9
Small open economy (SOE) business cycles
Endowment economies // Deterministic shocks // Stationary economies
Nonstationary economies // Production economies

Reading: Aguiar and Gopinath (2007)
Notes: Small open economies // soe-deterministic.jl, soe-random-stationary.jl

Week 10: November 14 & 16
Two-country business cycle models // Risk sharing

Reading:
Notes: Two-country models // Slides

Week 11: November 21 & 23
Two-country business cycle models

Reading: Cole and Obstfeld (1991), Backus and Smith (1993)
Notes:

Week 12: November 27 & 30
Two-country business cycle models

Slides: Two-country with production

Week 13: December 5 & 7
Sovereign debt
W: Yoon, Lord Medrano

Reading: Arellano (2008)
Notes: Debt

Week 14: December 12 & 14 // No in-class meeting December 14
Long presentations
M: Mcketty, Minoer

Reading: None
Notes: Long presentations

December 17: Long presentation mini-conference
9:00AM-Noon, 7142 Sewell Social Sciences Bldg.
S. Li, X. Li, Liu, Yun, Hu