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 a 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 8, October 20, and December 1. 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 presentation is of a paper from the literature. The goal is to practice distilling a paper down to its essentials.

Problem sets: Problem sets have been deprecated for 2023. 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 6
9/8 International workshop
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 11 & 13
The CES-monopolistic-competition model (static)

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

Week 2: September 18 & 20 // No in-class meeting September 20
Firm-level facts
Dynamic discrete-choice exporting models (the sunk cost model)

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

Week 3: September 25 & 27
Solving discrete-choice exporting models // Value/policy function iteration
Calibrating/estimating discrete-choice exporting models // General equilibrium

Reading: Alessandria, Choi, Ruhl (2021) // Real option example
Slides: Solving the sunk-cost model // Calibration in GE
Code: Julia code to solve PE model
Nongraded problem set: dynamic discrete choice

Week 4: October 2 & 4
Sunk-cost model catch up // Inventory models

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

Week 5: October 9 & 11
Application: Inventories and supply chains

Reading: Skim: AKKMR (2022)
Slides: Supply-chain disruptions intro // AKKMR (2022)

Week 6: October 16 & 18
10/20 International workshop
Economic geography

Reading: Allen and Arkolakis (2014) // Ahlfeldt, Redding, Sturm, and Wolf (2015)
Slides: Allen and Arkolakis // ARSW

Week 7: October 23 & 25 [make-up class 10AM October 28]
Economic geography

Reading: Caliendo, Dvorkin, Parro (2019)
Slides: CDP 2019

Short presentations
Short presentation details // Presentation tips // Some ideas on the reading list
W 10/25: Chaika, Remuszka, Garvey
S 10/28: Yang, Zheng, Cai, Tice-Raskin, McMain

Reading: None