• Hlavní stránka
• Stránky školy
• Stránky fakulty
• Kontakt
•  |  ENGLISH

Předměty

Advanced Microeconomics

General description

The course will focus on two main topics:

• Microeconomics of economic interactions
  • General equilibrium
  • Interactions and imperfect competition: monopolistic and oligopolistic competition
  • Interactions generated by externalities and public goods.
  • Interactions and contracts: adverse selection and moral hazard, contracts and the principal agent model.
• Microeconomics of welfare analysis, with its applications to
  • Taxation
  • Externalities and public goods

 The students are supposed to have a good knowledge (intermediate level) of:

• Consumer theory

• Production theory

• Monopoly analysis

• Game theory

 At the end of the course, the students must be able to

• Understand microeconomic concepts and tools used by research articles, particularly in the context of international economics, economic integration and economic geography.
• Use microeconomic tools for welfare analysis
• Develop simple microeconomic models with interacting agents.

 References

The reference textbook is

Varian, Microeconomic Analysis, W.W Norton, ISBN: 0-393-95735-7.

 Structure of the course

1. General Equilibrium

1.1. Basic structure of a general equilibrium

1.2. Definition of general equilibrium

1.3. Pareto-optimality: definition, first rank and second rank, implementation problem

1.4. Walrasian equilibrium of a private property economy. The welfare theorems. Example: the 2×2 model.

2. Imperfect competition

2.1. General structure of imperfect competition models

2.2. Monopolistic competition: the Dixit and Stiglitz model

2.3. Oligopolistic competition: Cournot, Bertrand, entry models, introduction to address models

3. Externalities and public goods

3.1. Definition of externalities and public goods. Rivalry and excludability. Club goods, local public goods.

3.2. Equilibrium and optimal provision of public goods. The Samuelson rule, the marginal congestion rule. Lindahl allocation and applications to the private provision of club goods.

4. Contracts and the principal agent model

4.1. Basic definition of a contract.

4.2. Contracts and informational asymmetries: moral hazard and adverse selection.

4.3. The principal agent model.

5. Welfare analysis

5.1. Basics of welfare analysis: Marshallian surplus, willingness to pay, willingness to receive. Relations to the Marshallian and Hicksian demands.

5.2. Welfare analysis in partial and general equilibrium: which agents must be included in welfare analysis?

5.3. Welfare analysis of taxation: the Ramsey-Boiteux Rule, Pigovian taxation, application to taxation of imports.

5.4. Welfare measures of externalities and of the provision of public goods.

 

Advanced Macroeconomics

1. Introduction

1.1 New Classical and New Keynesian Macroeconomics

1.2 Towards a consensus?

2. Rational Expectations and Economic Policy

2.1 What are Rational Expectations?

2.2 The Policy Ineffectiveness Proposition and Time Inconsistency

3. Price Rigidity in Goods and Labour Markets

3.1 Surprises, Menu Costs and Staggered Price Adjustments in the Goods Market

3.2 Contracts, Efficiency Wages and Sticky Wages in the Labour Market

3.3 Modelisation of Price Rigidity: Calvo and Rotemberg

4. Monetary Policy

4.1 Central BankIndependenceand the Transparency of Monetary Policy

4.2 Theory and Practice of Inflation Targeting

5. Financial Instability and the Real Economy

5.1 Endogenous financial instability

5.2 Transmission Mechanisms to the Real Economy – Contagions and the Financial Accelerator

6. Economic Dynamics

6.1 Real Business Cycles vs. endogeneity

6.2 Endogenous Growth Theory: Romer-type models vs Aghion and Howitt

6.3 Convergence Issues

 Reading:

Heijdra, B. and van der Ploeg, F. (2009), Foundations of Modern Macroeconomics, 2nd ed.,Oxford: Oxford University Press.

Romer, D. (2006), Advanced Macroeconomics, 3rd ed.,New York: McGraw-Hill Irwin.

 

Applied Econometrics

General description

The course focuses on the following topics

• General econometric methods: Maximum Likelihood and General Method of Moments.
• Endogeneity and instrumental variables estimation
• Time series analysis: general structure of time series models, univariate and multivariate analysis, non stationary model, VAR models.
• Panel data analysis: basic panel data analysis, introduction to dynamic panel data models.
• Limited dependent variable models: discrete choice models, truncated and censored data, sample selection models.

The course will focus on application, with manipulation of various datasets.

The students are supposed to have a good knowledge of

• Standard concepts of probability theory: probability distributions, main asymptotic results.
• Basic theory of estimation and tests.
• Ordinary least squares estimation
• Generalized least squares estimation

 At the end of the course, the students must be able to use standard econometric methods for their economic work.

 Reference: W.H; Greene, Econometric Analysis, Pearson Education, latest ed., ISBN: 0-13-513740-3.

Structure of the course

1. General econometric methods

1.1. Maximum Likelihood (ML): Definition, asymptotic properties. Tests based upon maximum likelihood.

1.2. General Method of Moments (GMM): Definition, asymptotic properties.

2. Endogeneity and instrumental variables estimation

2.1. Endogenous variables. Main reasons for endogeneity. Problems raised by endogeneity.

2.2. Definition of instrumental variables

2.3. Estimation with instrumental variables: IV estimation, generalization to GMM estimation.

3. Time series analysis

3.1. General structure of stationary time series models: time series process, autoregressive and moving average processes, autocorrelation and partial autocorrelation. Main types of econometric models with time series.

3.2. Non-stationarity: trends, random walks, unit roots

3.3. Univariate analysis of time series: detection of non stationarity, Box and Jenkins analysis, seasonal acjustment.

3.4. Estimation of econometric models with stationary time series. VAR models.

3.5. Non-stationary time series and cointegration analysis

4. Panel data analysis:

4.1. General structure of panel data models. Fixed effects and random effects. Within and between transformations.

4.2. Estimation of panel data models when there is no time interdependence.

4.3. Introduction to dynamic panel data models. Arellano-Bond estimators.

5. Limited dependent variable models:

5.1. General structure of limited dependent variable (LDV) models. discrete choice models, truncated and censored data, sample selection models.

5.2. Estimation of discrete choice models

5.3. Estimation of models with truncated and censored data.

5.4. Estimation of models with sample selection

 

Open Economy Macroeconomics

1. Elasticity and absorption approaches to the balance of payments, Pilbeam, ch. 3.

2. Macroeconomic policy in an open economy: the Mundell-Fleming model

2a. the SOE case: Pilbeam, ch. 4.

2b. the 2-country case: repercussion effects: Dornbusch, ch. 3, section III; Stevenson et al., ch. 10, section 10.1.

3. The monetary approach to the balance of payments; Pilbeam, ch. 5.

4. Purchasing power parity and floating exchange rates: theory and evidence; Pilbeam, ch. 6.

5. The monetary approach to exchange rate determination; Pilbeam, ch. 7.

6. Dornbusch’s overshooting model of exchange rates; Pilbeam, ch. 7; Dornbusch, ch. 11; Stevenson et al., ch. 8, section 8.3.

7. Branson’s portfolio balance model; Pilbeam, ch. 8; Stevenson et al., ch. 5, section 5.3.2; ch. 8, section 8.4.

8. The ‘New Open-Economy Macroeconomics’ of Obstfeld and Rogoff, Meeusen, ‘The Economic Crisis and New-Keynesian DSGE models…’; Walsh, ch. 6; Obstfeld and Rogoff (a)

9. Fixed versus floating exchange rates in actual practice; Meeusen, ‘European Economic Integration…’,

10. The Credit Crunch; Meeusen, ‘The Credit Crunch…’

11. Co-ordination issues: co-operative and non-co-operative strategic behaviour; Stevenson et al., ch. 10, from p. 353 onwards; Heijdra and van de Ploeg, pp. 291-295.

12. Optimal currency areas; Baldwin and Wyplosz, ch. 13; De Grauwe, Part 1.

13. Economic policy in a 2-sector model of international trade: the SOE case; Dornbusch, ch. 5.

 Bibliography

BALDWIN, R. and C. WYPLOSZ, The Economics of European Integration, McGraw-Hill, 2004.

DE GRAUWE, P., Economics of Monetary Union, Oxford University Press, 2005.

DORNBUSCH, R., Open Economy Macroeconomics, Basic Books, 1980.

HEIJDRA, B.J. and F. VAN DER PLOEG, The Foundations of Modern Macroeconomics, Oxford University Press, 2002.

KRUGMAN, P. and OBSTFELD, M., International Economics, McGraw Hill, 2000.

MEEUSEN, W., ‘European Economic Integration: from business cycle to business cycle’, in: R. Wakeman (ed.), Themes in Modern European History since 1945, Routledge, 2003, pp. 234-262.

MEEUSEN, W., ‘The Credit Crunch: causes and consequences – a quick overview’, University of Antwerp discussion paper, 2009.

MEEUSEN, W., ‘The Economic Crisis and New-Keynesian DSGE Models: an evaluation’, Kwartaalschrift Economie, 6: 249-276.

OBSTFELD, M. and K. ROGOFF (a), ‘Exchange Rate Dynamics Redux’, Journal of Political Economy,1995, 103: 624-660.

OBSTFELD, M. and K. ROGOFF (b), Foundations of International Macroeconomics, MIT Press, Cambridge, Mass., 1996.

PENTECOST, E., Exchange Rates Dynamics, Edward Elgar, 1993.

PILBEAM, K., International Finance, Macmillan, 2006.

STEVENSON, A., V. MUSCATELLI and M. GREGORY, Macroeconomic Theory and Stabilisation Policy,  Philip Allan Publ., 1988.

WALSH, C.E., Monetary Theory and Policy, 2nd ed., MIT Press, Cambridge, Mass., 2003.

 

Economics of International Trade: theory and policy

The course provides a sound theoretical and analytical basis for examining and evaluating the causes and consequences of international trade and factors mobility. The course will be structured around a set of topics which include: the determinants of international trade (technological differences; differences in factor endowments; economies of scale and market structure; differences in preferences across countries); trade and factor mobility; international trade policies; problems of trade in primary commodities.

On successful completion of the course, students should be able to explain why all countries can benefit from international trade, despite differences in production technologies and factor endowments; understand the role of differences and similarities between countries in explaining international trade flows; predict the pattern of trade between countries and discuss the distributional effects within countries; discuss the implications of less-than-perfectly competitive market structures for trade between countries; explain the different trade policy instruments available to policy makers and discuss the arguments in favour of, and against, protection; analyze and critically assess the options of economic integration available to a country, in terms of free-trade and multilateral agreements; understand the causes and consequences of more recent phenomena such as the international fragmentation of production.

The recommended text is:

Markusen, James R., Melvin, James R., Kaempfer, William H. and Maskus, Keith E. (1995), International Trade: Theory and Evidence, International edition, New York: McGraw-Hill. (MMKWM)

The textbook will be integrated with additional compulsory readings (see below).

Note: compulsory readings are marked with *

 Part 1) Trade Theory

 

1) International trade and factor mobility: the main facts

Main reading from MMKWM:

Introduction to trade theory and policy (chp. 1)

Review of partial and general equilibrium analysis (chps. 2, 3 and 4)

Gains from trade (chp. 5)

Suggested readings:

World Trade Report (available on line: www.wto.org)

 

2) Technology, factor endowments and trade

Main reading from MMKWM:

The Ricardo model of comparative advantages (chp. 7)

The Heckscher-Ohlin model and the specific factor model (chps. 8 and 9)

Reading list:

Bernhofen, D.M. and J.C. Brown. “A Direct Test of the Theory of Comparative Advantage: The Case of Japan.”, Journal of Political Economy, vol. 112 (1), pp. 48-67, 2004

Deardorff, A.V. “Weak Links in the Chain of Comparative Advantage,” Journal of International Economics 9: 197-209, 1979.

Debaere, P., and Demiroglu, U., “On the Similarity of Country Endowments,” Journal of International Economics, pp. 101-136, 59, 2003

Dornbusch, Rudiger, Stanley Fischer, and Paul Samuelson, “Comparative Advantage, Trade and Payments in a Ricardian Model with a Continuum of Goods,” American Economic Review, 67, 1977, 823-839.

Golub, S. and Hsieh, C., “Classical Ricardian Theory of Comparative Advantage Revisited,” Review of International Economics, 8(2), pp. 221-234, 2000.

Trefler Daniel, “International Factor Price Differentials: Leontief was Right!”, Journal of Political Economy, 101, 1993, 961-987.

Trefler Daniel, “The Case of Missing Trade and Other Mysteries,” American Economic Review, 85, 1995, 1029-1046.

Chiquiar D., “Globalization, regional wage differentials and the Stolper-Samuelson Theorem: Evidence from Mexico”, Journal of International Economics 74: 170-93, 2008.

Freeman, R., A., “Art Your Wages Set in Beijing?” Journal of Economic Perspectives, 9 (3), Summer 1995.

 *Slaughter, M.J. “Globalization and Wages: A Tale of Two Perspectives.” World Economy 22:. 609-630, 1999.

*Wood, A., “How Trade Hurt Unskilled Workers,” Journal of Economic Perspectives, 9 (3), Summer 1995.

 

3) Imperfect competition and trade

Main reading from MMKWM:

Imperfect competition and international trade (chp. 11)

Increasing returns to scale and international trade (chp. 12)

Alternative theories of international trade (chp. 13)

Reading list:

Feenstra Robert C., “New Evidence on the Gains from Trade,” Review of World

Economics/Weltwirtschaftliches Archiv, December 2006.

Helpman Elhanan, “The structure of foreign trade,” Journal of Economic Perspectives, Spring 1999, 121-144.

Hummels David and James Levinsohn, “Monopolistic competition and international trade: reconsidering the evidence”, Quarterly Journal of Economics, 1995, 799-836.

Hummels David and Peter J. Klenow, “The Variety and Quality of a Nation’s Exports,” The American Economic Review, Volume 95, Number 3, June 2005, pp. 704-723 (20).

Krugman P., “New Theories of Trade Among Industrial Countries”, The American Economic Review, Vol. 73, No. 2, Papers and Proceedings, May, 1983, pp. 343-347.

 

4) Trade, specialization and economic growth

Main reading:

*Hausmann, Ricardo, Jason Hwang, and Dani Rodrik, “What You Export Matters,” Journal of Economic Growth, Volume 12, Issue 1, 2007, 1-25.

Reading list:

Lederman Daniel and William Maloney, “Trade Structure and Growth,” Policy Research Working Paper 3025, World Bank, 2003.

 

5). Factor mobility

Main reading from MMKWM:

International trade in production factors: migrations and FDI (chp. 21 and 22).

Reading list:

Baldwin, Richard (2006) Globalisation: the great unbundling(s), Economic Council of Finland, September, 2006.

 

Part 2) Trade Policy

 

Main reading from MMKWM:

Tariffs (chp. 15)

Quotas and Non-Tariff-Barrierss (chp. 16)

Strategic trade policy (chp. 17)

Preferential Trade Areas (chp. 18)

The political economy of trade policy (chp. 19)

International trade institutions and rules (chp. 20)

Reading list:

Winters, Alan (2004), Trade Liberalization and Economic Performance: an overview, Economic Journal, Vol. 114 (February), pp. 4-21

J. Bhagwati, D. Greenaway, A. Panagariya: Trading Preferentially: Theory and Policy. Economic Journal, 108 (July), 1128-1148

B. A. Blonigen, T. J. Prusa: The Cost of Antidumping: The Devil is in the Details. Journal of Policy Reform, December 2003, Vol. 6(4): 233-246.

C.P. Bow: China’s WTO Entry: Antidumping, Safeguards, and Dispute Settlement. NBER Working Paper No. 13349, 2007

A. Dixit: International Trade Policy for Oligopolistic Industries. Economic Journal, Vol. 94, Supplement:

Conference Papers (1984), pp. 1-16

J. Eaton, G. M. Grossman: Optimal Trade and Industrial Policy under Oligopoly. Quarterly Journal of Economics, Vol. 101, No. 2 (May, 1986), pp. 383-40

G.C. Hufbauer, K.A. Elliott: Measuring the Costs of Protection in the United States. Institute for International Economics, 1994

P.J. Kehoe, T.J. Kehoe: A Primer on Static Applied General Equilibrium Models. Federal Reserve Bank of Minneapolis Quarterly Review, Spring 1994, Volume 18, No. 1

P. Krugman: Is Free Trade Passe? Journal of Economic Perspectives, Volume 1, Number 2, Fall 1987, pp. 131-144

J. R. Markusen, A.J. Venables: Trade Policy with Increasing Returns and Imperfect Competition: Contradictory Results for Competing Assumptions. CEPR Discussion Paper 120/1986

J.R. Markusen, T.F. Rutherford, L. Hunter: Trade liberalization in a multinational-dominated industry. Journal of International Economics, Volume 38, Issues 1-2, February 1995, pp. 95-117

D. Puga, A.J. Venables: Preferential Trading Arrangements and Industrial Location. Journal of International Economics. Volume 43, Issues 3-4, 1 November 1997, pp. 347-36

A. Smith: Strategic Trade Policy in the European Car Market? in P. Krugman, A. Smith (eds.): Empirical Studies of Strategic Trade Policy. NBER. 1994

 

Economics of European Integration

Course description

This subject divides into two roughly equal parts. The first looks at the relevant microeconomic analysis for European integration – trade and customs union theory, the integration of factor markets and economic growth – and the second looks at the macroeconomic aspects of integration – the theory of optimum currency areas and monetary and fiscal policy in a monetary union.

There will be about 20 lecture hours associated with this module. In addition to the final examination, students are required to write an essay on an empirical topic during the semester, which should not exceed 2,500 words, selected from the list at the end of this schedule.

Prerequisites

It is presumed that students taking this module have completed the modules in Advanced Macroeconomics, Advanced Microeconomics and Econometrics in the first semester.

Lecture Topics and references

The following are the main topics together with textbook and selected other principal references cited above. Other specific references, especially journal articles will be given in lectures.

I. Microeconomic analysis

I.1 What is Economic integration? [1 lecture]

Types of economic integration; characteristics of integration in the EU; future prospects.

Refs: Hansen & Nielsen, Ch. 1; Pelkmans, Ch. 1.

I.2 Customs Unions [2 lectures]

The traditional model, a two-good model and terms of trade effects.

Empirical methodology. Empirical studies and evaluation of results.

Refs: Hansen & Nielsen, Ch. 2.

I.3 New Trade Theory [2 lectures]

Effects of goods market competition: complete, partial and third country.

Market size and product variation. Firm size effects.

Refs: Hansen & Nielsen, Ch. 3.

I.4 Common Market Theory [2 lectures]

A model of international factor mobility.

Multinationals and foreign direct investment.

Refs: Hansen & Nielsen, Ch. 4.

I.5 Dynamic and Spatial Aspects of Integration [2 lectures]

Capital accumulation and growth.

A new growth model of specialisation & economies of scale.

Refs: Hansen & Nielsen, Ch. 5.

I.6 Convergence or Divergence in the EU? [1 lecture]

Empirical methodologies. Empirical results and evaluation of the evidence.

Refs: Hansen & Nielsen, Ch. 5; Meeusen & Villaverde (eds), Chs 2 & 3.

II. Macroeconomic Analysis

II.1 The Theory of Monetary Integration [3 lectures]

Microeconomic efficiency: transactions costs, uncertainty and seigniorage.

Macroeconomic stability: policy autonomy & optimal currency areas.

Evaluation of costs and benefits.

Refs: Hansen & Nielsen, Ch. 7; De Grauwe, Chs 1-4.

II.2 A Model of Economic Policy in a Monetary Union [2 lectures]

The Levin model. Monetary and fiscal policy with fixed prices

The model with flexible prices. Co-ordination and interdependence.

Refs: Hansen & Nielsen, Ch. 8.

II.3 Monetary policy in EMU [2 lectures]

The theory of central bank autonomy. The ECB and policy conflicts.

Monetary policy in Euroland. Instruments of monetary policy.

Refs: De Grauwe, Chs 7 & 8; Hansen & Nielsen, Ch. 9; Pentecost & Van Poeck (eds), Ch. 5.

II.4 Fiscal policy in EMU [1 lecture]

Fiscal discipline, autonomy and stabilisation. Fiscal policy co-ordination.

Refs: De Grauwe, Ch. 9; Hansen & Nielsen, Ch. 9; Pentecost & Van Poeck (eds), Ch. 6.

II.5 The Transition to EMU [3 lectures]

The forerunners: Werner Report, the Snake and the EMS.

The Maastricht Treaty, Stability Pact and convergence criteria.

The ‘Ins’ and ‘Outs.’ Future developments and prospects.

Refs: De Grauwe, Chs 5 & 6; Hansen & Nielson, Ch. 10; Pentecost & Van Poeck (eds), Ch. 2.

Reading list

Recommended Text

Jorgen, J.D. & J.U. Nielsen, (1997), An Economic Analysis of the EU, 2nd edition, McGraw-Hill: London.

Other Useful Texts & Edited Volumes

De Grauwe, P. (2000), The Economics of Monetary Union, 4th edition, Oxford University Press: Oxford.

Meeusen, W. & J. Villaverde (eds) (2002), Convergence Issues in the European Union, Edward Elgar: Cheltenham.

Pelkmans, J. (2001), European Integration: Methods and Economic Analysis, 2nd edition, Pearson Education: Harlow.

Pentecost, E.J. & A. Van Poeck (eds), (2001), European Monetary Integration: Past, Present and Future, Edward Elgar: Cheltenham.

Survey Articles

Bean, C.R. (1992), ‘Economic and Monetary Union in Europe,’ Journal of Economic Perspectives, 6(4),31-52.

Eichengreen, B. (1993), ‘European Monetary Unification,’ Journal of Economic Literature, 31, 1321-57.

Ishiyama, Y. (1975), ‘The Theory of Optimum Currency Areas: A Survey,’ IMF Staff Papers, 22, 344-83.

Lipsey, R.G. (1960), ‘The Theory of Customs Unions: A General Survey,’ Economic Journal, 70, 496-513.

 

Economics of Globalisation

1. The stylized facts of globalisation

2. Bhagwati’s ‘In Defense of Globalization’ and the reactions to it.

Jagdish Bhagwati, In Defense of Globalisation, Oxford University Press, 2004

3. International Mobility of Technology: ‘R&D and productivity: the international connection’

Elhanan Helpman (A. Razin and E. Sadka (eds), op. cit.)

4. Capital Flows and Exchange Rate Misalignment: ‘International implications of German unification’

Hans-Werner Sinn (A. Razin and E. Sadka (eds), op. cit.) ‘Real exchange rate misalignment and growth’

Ofair Razin and Susan M. Collins (A. Razin and E. Sadka (eds), op. cit.)

5. The Incentives and Patterns of Capital Flows: ‘A pecking order of capital inflows and international tax principles‘

Assaf Razin, Efraim Sadka, and Chi-Wa Yuen (A. Razin and E. Sadka (eds), op. cit.)

‘Transfer pricing as a strategic device for decentralized multinationals’

Guttorm Schjelderup and Lars Sorgard (A. Razin and E. Sadka (eds), op. cit.)

6. Limits to Income Redistribution in Federal Systems: ‘Income redistribution in an economic union: the tradeoff between inter- and international redistribution’

Helmuth Cremer and Pierre Pestieau (A. Razin and E. Sadka (eds), op. cit.)

7. Tax Harmonization, Tax Co-ordination, and the ‘Disappearing Taxpayer’:

‘Is there a need for a world tax organization?’

Vito Tanzi (A. Razin and E. Sadka (eds), op. cit.)

‘Taxation, financial innovation, and integrated financial markets: some implications for tax coordination in the European Union’

Julian S. Alworth (A. Razin and E. Sadka (eds), op. cit.)

8. Political Economy Aspects of International Tax Competition: ‘Factor taxation, income distribution, and capital market integration’

Andreas Haufler (A. Razin and E. Sadka (eds), op. cit.)

‘Interjurisdictional tax competition: a political economy perspective’

Carlo Perroni and Kimberley Scharf (A. Razin and E. Sadka (eds), op. cit.)

9. Migration of Skilled and Unskilled Labor:

‘Economic integration, factor mobility, and wage convergence’

Gilles Saint-Paul (A. Razin and E. Sadka (eds), op. cit.)

10. Fiscal Aspects of Monetary Unification:

‘The interaction of fiscal and monetary policy in a monetary union: balancing credibility and flexibility’

Roel M. W. J. Beetsma and A. Lans Bovenberg (A. Razin and E. Sadka (eds), op. cit.).

Source:

A. Razin and E. Sadka (eds), The Economics of Globalization – Policy Perspectives from Public Economics, Cambridge: Cambridge University Press, 1999 (ISBN-13: 9780521622684 | ISBN-10: 0521622689).

Special Topics in Applied Econometrics

General description

The course will focus on the following specific econometric methods:

• Spatial statistics and econometrics: application to cross sections and panels
• Poisson models and more generally counting models
• Duration models and event history models.

The course will focus on application, work being based upon specific datasets.

The students are supposed to have a good knowledge of

• Standard concepts of probability theory
• Basic theory of estimation and tests
• Ordinary least squares estimation
• Generalized least squares estimation.

References

Specialised articles from the professional literature

Structure of the course

1. Spatial statistics and econometrics: application to cross sections and panels.

1.1. Introduction to spatial dependence: definition, consequences on linear models

1.2. Testing spatial dependence

1.3. Estimating models with spatial dependence

This chapter will use data on

• Regional growth in Europe

• Migration in European regions

 2. Poisson models and more generally counting models

2.1. Introduction to Poisson and negative binomial models

2.2. Estimation methods for Poisson and negative binomial models

This chapter will use data on

• Migration flows for small regions

 3. Duration models and event history models.

3.1. Introduction to the specificity of duration and event history data. Hazard functions

3.2. Basic models: the proportional hazards model and the parametric models

3.3. Estimation methods and tests

This chapter will use data on

• Employment and unemployment spells

• Time to migration.

 

Special Topics in International Trade

The course provides an in-depth analysis of selected topics related to trade and international factor mobility. The set of topics included are the following:

- Firms in International Trade;

- The international fragmentation of production (offshoring / oursourcing)

- Trade and Multinationals;

- Economics of international Migration;

- New Economic Geography;

- Trade policy in Developing and Emerging Countries.

On successful completion of the course, students should be able to:

(i) understand using the new theoretical and empirical apparatus recently developed in the literature (and known as new trade theory) the role of firms in international markets. In particular the students should be able to explain why firms engage in international markets and what are the main characteristics of international firms compared to firms which operate in a smaller market. In addition students should be able to evaluate the consequences of trade integration on firms within given sector of the economy;

(ii) evaluate the role of Multinational enterprises in the global economy.

(iii) assess the main determinants and the economic consequences of international migration flows for both sending and origin countries;

(iv) understand how regional/global economic integration might affect the geographical distribution of economic activities through agglomeration and dispersion forces.

(v) explain the different trade policy instruments available to policy makers in developing and emerging economies and evaluate their welfare effects.

 

Topic 1. Firms in International Trade and the fragmentation of production

- Trade theory with heterogeneous firms;

- The impact of trade integration on intra-industry reallocation of firms and sector productivity;

- The economics of fragmentation: causes and consequences

 Core readings:

Bernard, Andrew B., Stephen Redding, Peter K. Schott (2007), Comparative Advantage and Heterogeneous

Firms, Review of Economic Studies, vol 74, January.

Bhagwati, Jagdish, Arvind Panagariya and T. N. Srinivasan, “The Muddles over Outsourcing,” Journal of Economic Perspectives, 18:4, 2004, 93-114.

Blinder, Alan S., “Offshoring: The Next Industrial Revolution?,” Foreign Affairs, 85:2, 2006, 113-128.

Chaney, Thomas (2005), Distorted Gravity: Heterogeneous Firms, Market Structure and the Geography of International Trade, American Economic Review, September 2008, Vol. 98, No. 4.

Levy, F. and K. Yu, “Offshoring Radiology Services to India,” manuscript, 2006.

Melitz Marc, International Trade and Heterogeneous Firms, The New Palgrave Dictionary of Economic Online, 2008

Melitz, Marc J. (2003), The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity, Econometrica, 71:6, pp. 1695-1725.

Samuelson, Paul, “Where Ricardo and Mill Rebut and Confirm Arguments of Mainstream Economists Supporting Globalization, Journal of Economic Perspectives, pp. 135-146, 18(3), Summer 2004.

Lecture notes

 Topic 2. Trade and Multinationals;

- Facts and issues;

- The theory of the Multinational enterprise;

- The determinants of Foreign Direct Investments;

- Effects of FDI in sending and recieving countries: evidence;

- FDI and Economic Policy;

 Core reading:

Lecture notes

Barba-Navaretti G., Venables A. (2004), Multinational firms in the world economy, Princeton New Jersey: Princeton University Press

Markusen, James R. (2002), Multinational Firms and the Theory of International Trade, Cambridge, MA: MIT Press.

 Topic 3. Economics of international Migration

- Stylized facts about international migration;

- The socio-economic determinats of international migration: theory and empirics;

- Migration and development (the economics of remittances and return migration);

- The economic effects of migration in the hosting country;

- Illegal migration and migration policy

Lecture notes and selected readings

 Topic 4. New Economic Geography

- Geography and economic theory;

- The core model of geographical economics;

- Beyond the core model;

- Agglomeration the home market effects and spatial wages;

- Agglomeration and international business;

- Agglomeration and trade;

 Core reading:

Lecture notes

Brakman S., H. Garretsen C. van Marrewijk (2009) The new introduction to geographical economics, Cambridge University Press.

 Topic 5. Trade policy in Developing and Emerging Countries.

- Trade liberalization in developing countries;

- Trade policy and economic performance: the evidence;

- Protectionism and development;

- The role of Institutions in International Trade

 Core reading:

Lecture notes

Greenwald Bruce and Joseph Stiglitz (2006), Helping Infant Economies Grow: Foundations of Trade Policies for Developing Countries, American Economic Review, May 2006. , pp.141-146

Edwards, S. (1993), Openness, trade liberalization, and growth in developing countries, Journal of Economic Literature, vol. 31 (3), pp. 1358–1393.

Harrison, A. (1996) Openness and growth: a time-series, cross-country analysis for developing countries, Journal of Development Economics, Vol. 48 (2), pp. 419–447.

Rodrik D. (1988), Imperfect Competition, Scale Economies, and Trade Policy in Developing Countries in R. E. Baldwin (ed.): Trade Policy Issues and Empirical Analysis. NBER 1988

Levchenko, Andrei (2007), Institutional Quality and International Trade, Review of Economic Studies, 74:3 (July 2007), 791- 819.

 

Special Topics in International Finance

1. Introduction

1.1 Sources of finance in the global economy

1.2 The role of risk management and international markets

2. Risk and Uncertainty

2.1 Investment and Project Appraisal

2.2 Capital rationing, taxation and inflation

3. Hedging and Derivatives

3.1 Futures, options and swaps

3.2 Managing risk in commodity, currency and capital markets

4. International Corporate Value

4.1 Value measurement and capital asset pricing

4.2 Value at risk and the cost of capital

5. Mergers and Acquisitions

5.1 Gearing and leverage in merger waves

5.2 International conglomerates and buy-outs

6. Global Outsourcing

6.1 Direct Foreign Investment

6.2 Agency issues in capital structure

 Reading:

Arnold, G. (2008), Corporate Financial Management 4th. Edition, Harlow: FT-Prentice-Hall.

Ross, S. et al., (2008), Modern Financial Management, 8th. Edition, London: McGraw-Hill.

 

Economics of Regulation

1. Introduction

1.1. Instruments of regulation

1.2. Regulatory process

1.3. Economic theory of regulation

2. Natural monopoly regulation

2.1. Rate and rate structure

2.2. Peak-load pricing

2.3. (De)regulation of electric power

3. Franchise bidding

3.1. Competition at the bidding stage

3.2. The postbidding stage

4. Public enterprise

4.1. Positive theory of public enterprise

4.2. Comparison of public and private enterprises

5. (De)regulation on financial markets

5.1. Deregulation and the Credit Crunch: the historic record

5.2. To need to regulate again: Glass-Steagall(bis)

6. Capita selecta

6.1. Dynamics in natural monopoly regulation

6.2. Economic regulation of potentially competitive markets

6.3. Economic regulation of transportation

6.4. Economic regulation of energy

6.5. Environmental regulation

6.6. Product safety regulation

6.7. Patents

6.8. Regulation of workplace health and safety.

 Sources:

Viscusi W.K., Harrington J.E., Vernon J.M., Economics of antitrust and regulation, MIT Press, 4th edition, 2005.

Stiglitz, J., Freefall: America, Free Markets and the Sinking of the World Economy, Norton, 2010.

---