Reading Lists for Econ 555

Hiro Kasahara

Freenstra, R.C. (2004) Advanced International Trade: Theory and Evidence, Princeton University Press (henceforth Freenstra).

Helpman, E. and P. Krugman, Market Structure and Foreign Trade: Increasing Returns, Imperfect Competition, and the International Economy, MIT Press (henceforth, HK).

1). Ricardian Model

  • Chipman, John S. (1965) ``A Survey of the Theory of International Trade: Part 1, The Classical Theory,'' Econometrica, 33(3): 477-519.
  • *Dornbusch, R., S. Fischer, and P.A. Samuelson (1977) ``Comparative Advantage, Trade and Payments in a Ricardian Model with a Continuum of Goods,'' American Economic Review, 67: 823-839.
  • *Freenstra, pp.1-4.
  • Wilson, C. A. (1980) ``On the General Structure of Ricardian Models with a Continuum of Goods: Applications to Growth, Tariff Theory, and Technical Change,'' Econometrica, 48(7): 1675-1702.

2). Factor Endowment Models

  • Dixit A.K. and V. Norman (1980) Theory of International Trade, Cambridge University Press, Chapters 1-4. [in Reference Centre]
  • Dornbusch, R., S. Fischer, and P.A. Samuelson (1980) ``Heckscher-Ohlin Trade Theory with a Continuum of Goods,'' Quarterly Journal of Economics, 95: 203-24.
  • *Feenstra, Chapters 1-3.
  • *HK, Chapter 1.
  • Harrigan, J. (1997) ``Technology, Factor Supplies, and International Specialization: Estimating the Neoclassical Model,'' American Economic Review, 87: 475-94.
  • Mundell, R.A. (1957) ``International Trade and Factor Mobility,'' American Economic Review, 47: 321-35.
  • Trefler, D. (1993) ``International Factor Price Differences: Leontief was Right!'' Journal of Political Economy, 101: 961-987.
  • Trefler, D. (1995) ``The Case of the Missing Trade and Other Mysteries,'' American Economic Review, 85: 1029-46.

3). Monopolistic Competition and Increasing Returns

  • HK, Chapters 6-8.
  • *Krugman, P.R. (1979) ``Increasing Returns, Monopolistic Competition, and International Trade,'' Journal of International Economics, 9: 469-79. [In Reference Centre – not available online]
  • *Krugman, P.R. (1980) ``Scale Economies, Product Differentiation, and the Pattern of Trade,'' American Economic Review, 72: 950-959.
  • *Freenstra, Chapter 5.
  • Ethier, W.J. (1982) ``National and International Returns to Scale in the Modern Theory of International Trade,'' American Economic Review, 72: 389-405.
  • Hummels, D. and J. Levinsohn (1995) ``Monopolistic Competition and International Trade: Reconsidering the Evidence.'' Quarterly Journal of Economics, 110(3): 799-836.
  • Hummels, D. and P.J. Klenow (2005) ``The Variety and Quality of a Nation’s Exports,'' American Economic Review, 95: 704-723.

4). Trade in Intermediate Inputs and Production Sharing

  • *Feenstra, Chapter 4.
  • Yeats, A.J. (2001) ``Just How Bit is Global Prodution Sharing?,’’ in S.W. Arndt and H. Kierzkowski (eds), Fragmentation, New York: Oxford University Press.
  • Feenstra, R. (1998) ``Integration of Trade and Disintegration of Production in the Global Economy,’’ Journal of Economic Perspectives, 12: 31-50.
  • Hummels, David, Jun Ishii, and Kei-Mu Yi (2001) ``The Nature and Growth of Vertical Specialization in World Trade,’’ Journal of International Economics 54: 75-96.

5). Gravity Equation

  • *Freenstra, Ch. 5.
  • Anderson, J. and E. van Wincoop (2003) ``Gravity with Gravitas: A Solution to the Border Puzzle,'' American Economic Review, 93: 170-192.

6). Heterogeneous Firms and International Trade

6.1). Empirical Motivations

  • *Bernard, Andrew B., J. Bradford Jensen, and Peter K. Schott (2005) ``Importers, Exporters, and Multinationals: A Portrait of Firms in the U.S. that Trade Goods,'' NBER Working Paper 11404.
  • Bernard, Andrew B. and J. Bradford Jensen (2004) ``Why Some Firms Export," Review of Economics and Statistics, 86(2): 561-569.
  • Bernard, Andrew B. and J. Bradford Jensen (1999) ``Exceptional Exporter Performance: Cause, Effect, and or Both?'' Journal of International Economics, 47: 1-25.
  • Eaton, J. and S. Kortum, Technology in the Global Economy}, Chapter 2, available at
  • Eaton, Jonathan, Samuel Kortum, and Francis Kramarz (2004) ``Dissecting Trade: Firms, Industries, and Export Destinations,'' American Economic Review Papers and Proceedings, 94: 150-154.
  • *Roberts, Mark and James R. Tybout (1997) ``Decision to Export in Columbia: An Empirical Model of Entry with Sunk Costs" American Economic Review, 87: 545-564.
  • Tybout, James (2001) ``Plant- and Firm-level Evidence on the `New' Trade Theories,'' NBER Working Paper No. 8418.

6.2). Theoretical Models

  • *Bernard, Andrew B., Jonathan Eaton, J. Bradford Jensen, and Samuel Kortum (2003) ``Plants and Productivity in International Trade,'' American Economic Review, 93(4): 1268-1290.
  • *Bernard, A., S. Redding and P. Schott (2004) ``Comparative Advantage and Heterogeneous Firms,'' Review of Economic Studies, forthcoming. [Working Paper version ]
  • Chaney, T. (2005), ``Distorted Gravity: Heterogeneous Firms, Market Structure, and the Geography of International Trade,'' mimeo, University of Chicago.
  • *Helpman, Elhanan, Mark Melitz, and Yona Rubinstein, “Estimating Trade Flows: Trading Partners and Trading Volumes,” Quarterly Journal of Economic, forthcoming.
  • *Melitz, M. (2003) ``The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity,'' Econometrica, 71(6): 1695-1725.
  • Melitz, M. and G. I.P Ottaviano (2005) ``Market Size, Trade, and Productivity,'' NBER Working Paper 11393.
  • Yeaple, S. (2005) ``A Simple Model of Firm Heterogeneity, International Trade and Wages,'' Journal of International Economics 65: 1-20.

7). Multinationals

  • Freenstra, Chapter 11.
  • Markusen, J. R. (2002) Multinational Firms and the Theory of International Trade}, Cambridge. Available at Economics Reference Centre.
  • Navaretti, B.G., and A.J. Venables (2004) Multinational Firms in the World Economy, Princeton and Oxford: Princeton University Press.
  • Bernard, A., B. Jensen, and P. Schott (2005) ``Importers, Exporters, and Multinationals: A Portrait of Firms in the U.S. that Trade Goods,’’ NBER Workig Paper No. 11404.
  • Brainard, S. (1997) ``An Empirical Assessment of the Proximity-Concentration Trade-off between Multinational Sales and Trade,'' American Economic Review, 87: 520-44.
  • Ekholm, K. R. Forslid, and J.R. Markusen (2005) ``Export-Platform Foreign Direct Investment,'' mimeo, Unversity of Colorado.
  • Hanson, G., R. Mataloni, and M. Slaughter (2001) ``Expansion Strategies of U.S. Multinational Firms’’ Brookings Trade Forum: 2001, 245:294.
  • Head, K. and J. Ries (2003) ``Heterogeneity and the FDI versus Export Decision of Japanese Manufacturers,'' Journal of the Japanese and International Economies, 17: 448-467.
  • Head, K. and J. Rise (2002) ``Offshore Production and Skill Upgrading by Japanese Manufacturing Firms,’’ Journal of International Economics, 58:81-105.
  • HK, Chapters 12-14.
  • Helpman, E. (1984) ``A Simple Theory of International Trade with Multinational Corporations,'' Journal of Political Economy, 92(3): 451-471.
  • Helpman, E. (2006) ``Trade, FDI and the Organization of Firms,'' mimeo, Harvard University.
  • *Helpman, E., M. J. Melitz, and S. R. Yeaple (2004) ``Export Versus FDI with Heterogeneous Firms,'' American Economic Review, 94: 300-317.
  • Yeaple, S. R. (2005) ``Firm Heterogeneity and the Structure of US Multinational Enterprise: An Empirical Analysis,'' mimeo, University of Pennsylvania.

8). Quantitative Analysis of Trade Policy

8.1). Trade, Firm Productivity, and Wage

  • *Alla Lileeva and Daniel Trefler (2007) ``Improved Access to Foreign Markets Raises Plan-level Productivity ...for Some Plants,'' NBER Working Papers 13297.
  • Amiti, M., and J. Konings (2007) ``Trade Liberalization, Intermediate Inputs, and Productivity: Evidence from Indonesia,’’ American Economics Reviews, 97(5): 1611-1638.
  • Amiti, M., and D. Davis (2008) ``Trade, Firms, and Wages: Theory and Evidence,’’ NBER Working Paper 14106.
  • Pavcnik, N. (2003) ``What Explains Skill Upgrading in Less Developed Countries?’’ Journal of Development Economics, 71: 311-328.
  • Clerides, S., Lach, S., and J. R. Tybout (1998) ``Is Learning by Exporting Important? Micro-Dynamic Evidence from Colombia, Mexico, and Morocco," Quarterly Journal of Economics, 113: 903-947.
  • Head, K. and J. Ries (1999) ``Rationalization Effects of Tariff Reductions,'' Journal of International Economics, 47: 295-320
  • Kasahara, H., and J. Rodrigue (2008) ``Does the Use of Imported Intermediates Increase Productivity? Plant-Level Evidence,'' Journal of Development Economics, 87(1): 106-118.
  • Levinsohn, James and Amil Petrin (2003) ``Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, 70:317-341.
  • Olley, S. and Pakes, A. (1996) ``The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, 64(6): 1263-97.
  • Pavcnik, Nina (2002) ``Trade Liberalization, Exit, and Productivity Improvements: Evidence From Chilean Plants,'' Review of Economic Studies, 69(1): 245-276.
  • Trefler, D. (2004) ``The Long and Short of the Canada-U.S. Free Trade Agreement,'' American Economic Review, 94(4): 870-895.

8.2). Structural Estimation and Calibration

  • Alvarez, F. and R.E. Lucas (2005) ``General Equilibrium Analysis of the Eaton-Kortum Model of International Trade,'' NBER Working Paper No. 11764.
  • Fieler, A. (2008) ``Non-Homotheticity and Bilateral Trade: Evidence and a Quantitative Explanation,’’ mimeo, NYU.
  • Waugh, M. (2008) ``International Trade and Income Differences,’’ mimeo, University of Iowa.
  • Chor, D. (2008) ``Unpacking Sources of Comparative Advantage: A Quantiative Approach,’’ mimeo, Singapore Management University.
  • Berry, S. J. Levinsohn, and A. Pakes (1999) ``Voluntary Export Restraints on Automobiles: Evaluating a Trade Policy,'' American Economic Review, 89: 400-430.
  • *Eaton, J. and S. Kortum (2002) ``Technology, Geography, and Trade,'' Econometrica, 70: 1741-1780.
  • Eaton, J., S. Kortum, and F. Kramarz (2005) ``An Anatomy of International Trade: Evidence from French Firms.’’
  • *Das, M., M. J. Roberts, and J. R. Tybout (2007) ``Market Entry Costs, Producer Heterogeneity and Export Dynamics,'' Econometrica.
  • Feinberg, S.E. and Michael P. Keane (2006) ``Accounting for the Growth of MNC-based Trade Using a Structural Model of U.S. MNCs,'' American Economic Review, forthcoming.
  • Kasahara, H. and B. Lapham (2008) ``Productivity and the Decision to Import and Export: Theory and Evidence,’’ CESifo Working paper.
  • Yi, K.-M. (2003) ``Can Vertical Specialization Explain the Growth of World Trade?'' Journal of Political Economy, 111: 52-102.