International Trade (DEEQA)

Syllabus

Instructor: Thomas Chaney

Office location: MF 521
Email: [email protected]
Class website: https://sites.google.com/site/thomaschaney/teaching/trade
Office hours: by arrangement.

Course outline
This course is an advanced course in International Trade. It is tar-
geted at second year PhD students. It is part of a sequence in economic
growth and international trade. Erzo Luttmer teaches the first half of
the first semester.

This course introduces students to the theories of international trade,

with a special emphasis on the role of firms. After an introduction
on key empirical regularities and traditional theories of international
trade, we move on to study the most recent work in international trade:
trade from the point of view of individual firms. First, we will try and
understand the determinants of the decision of firms to export or not,
which foreign market to enter, the role of heterogeneity between firms
in shaping those decisions, and the aggregate behavior of an economy
populated with such heterogeneous firms. Second, we will study the
determinants of the size distribution of firms, as the heterogeneity in size
is the key novel ingredient of modern models of firms and international
trade. Third, we will study recent advances on the connection between
international trade and wage inequality. Firnally, we will study the
international organization of production, focusing on recent models of
off-shoring, outsourcing and foreign direct investment.

1
 Grading
The grade will be based class participation, weekly reports, an oral
presentation, and a research proposal.

Weekly reports: every week, for each new paper that we will cover
at length in class, students should send me a brief comment by email on
the evening before the class (don’t forget to write your name on your
report [for me when I print them], and on the file name [for file keeping]).
The comment should consist of a summary of the paper, 1 or 2 pages
at most. You should briefly describe the main idea/contribution of the
paper. For theoretical papers, I expect a verbal sketch of the model,
describing the steps in the reasoning, and the generality of the model.
For empirical papers, you should describe the empirical procedure and
the data used, and the robustness of the results. Finally, you should
assess the importance of the paper in the literature, and describe how
it relates to other papers we may have studied. The email should be
concise. You can skip up to two papers in the quarter.
Oral presentation: the last two weeks of the class will be devoted
to student presentations. Students will present their choice from a set of
papers that map the frontier of both this class, and research in interna-
tional trade. The presentations will be 1h long. I expect the students to
write slides down, as if they were presenting their own work. The goal
is for the audience to gain a clear understanding of the paper presented.
Research proposal: a research proposal is due at the end of the
second semester. This proposal should sketch what could become a
dissertation chapter of your thesis. Describe the main question you want
to address with this research, motivated by stylized facts, the existing
literature, or make a case that this question is particularly interesting.
For a theoretical paper, work out at least a simple case of the model,
and/or explore some numerical versions of the model; sketch what a
more elaborate model would look like. For an empirical paper, describe
what would be an ideal dataset, look for such existing datasets (you
don’t necessarily have to actually get your hand on the data), and spell
out precisely what empirical procedure you would follow; you should
present at least some reduced form evidence, if possible.

Class participation will contribute to 10% of the grade, the weekly

reports, the oral presentation and the research proposal 30% each.

2
 Reading list
Double starred papers (**) are to be read prior to the beginning of
the class, and the weekly reports will be based on those papers. Single
starred (*) papers should be read shortly after the class.

There are no assigned textbook for this class. However, I recommend

the following,

• Feenstra, R. (2004), Advanced International Trade. Theory and

Evidence, Princeton University Press.

• Helpman, H. and P. Krugman (1985), Market Structure and

Foreign Trade, Cambridge, MIT Press.

1 Introduction
Some stylized facts about international trade and investment.

Some trends

• Baldwin, Richard and Philippe Martin (1999), "Two Waves of

Globalisation: Superficial Similarities, Fundamental Differences",
NBER working paper 6904.

1.1 Gravity equations and trade barriers

Gravity Equations

• Feenstra, R. (2004), Advanced International Trade. Theory and

Evidence. Chapter 5

• (*) Anderson, J. and E. van Wincoop (2003), "Gravity with

Gravitas: A Solution to the Border Puzzle," AER.

• (*) McCallum, J. (1995), "National Borders Matter: Canada-US

Regional Trade Patterns," AER.

• (*) Disdier, Anne-Celia, and Keith Head (2008), "The Puzzling

Persistence of the Distance Effect on Bilateral Trade", Review of
Economics and Statistics.

3
• Deardorff, A. (1998), "Determinants of Bilateral Trade: Does
Gravity Work in a Neoclassical World?," in J. Frankel ed., The
Regionalization of the World Economy, University of Chicago for
the NBER.

• Combes, P-P., Lafourcade M. and T. Mayer (2005), “The

Trade Creating Effects of Business and Social Networks: Evidence
from France,” Journal of International Economics, 66:1-29.

• Ramondo, Natalia (2008), “Size, Geography, and Multinational

Production”, mimeo UT Austin.

• Portes, Richard and Helene Rey (2005), "The Determinants of

Cross Border Equity Flows," Journal of International Economics,
Volume 65, Issue 2, pp. 269-296, March 2005.

• Aviat, Antonin and Nicolas Coeurdacier (2007), "The Geogra-

phy of Trade in Goods and Asset Holdings," Journal of Interna-
tional Economics.

• Head, Keith and Thierry Mayer (2002), "Illusory Border Ef-

fects: Distance Mismeasurement Inflates Estimates of Home Bias
in Trade," CEPII Working Paper 2002-01.

Trade Barriers

• (*) Anderson, James E. and Eric van Wincoop (2004), "Trade

Costs," Journal of Economic Literature, 42, 691-751.

• (*) Grossman, Gene: discussion of Deardorff, A. (1998), "De-

terminants of Bilateral Trade: Does Gravity Work in a Neoclassi-
cal World?," in J. Frankel ed., The Regionalization of the World
Economy, University of Chicago for the NBER.

• Jacks, David, Chris Meissner, and Dennis Novy (2008), "Trade

Costs, 1870-2000" American Economic Review Papers & Proceed-
ings, 98(2), May 2008, pp. 529-534

• Anderson, James E. (November, 2001), "Trade and Informal In-

stitutions," Published in Handbook of International Trade, Vol. 2,
James Hartigan and E. Kwan Choi, eds., Oxford: Blackwell Pub-
lishing, 2005, pp. 279-93.

• Rauch, James (1999), "Networks versus Markets in International

Trade," Journal of International Economics, 48, 7-35.

4
 • Rauch, James (2001), “Business and Social Networks in Interna-
tional Trade,” Journal of Economic Literature, 39, December, pp.
1177-1203.

• Rauch, James and Vitor Trindade (2002), "Ethnic Chinese Net-

works in International Trade", Review of Economics and Statistics
84 (February 2002): 116-130.

• Bernard A. and J. B. Jensen (2004), “Why Some Firms Export”,

The Review of Economics and Statistics, Vol. 86, No. 2.

• Roberts M. and J. Tybout (1997), “The Decision to Export in

Colombia: An Empirical Model of Entry with Sunk Costs,”American
Economic Review, 87(4), 545-564.

1.2 Preliminary: Basic Models of International Trade

Comparative Advantages

• (**) Dornbusch, R., S. Fischer and P. Samuelson (1977),

"Comparative Advantage, Trade, and Payments in a Ricardian
Model with a Continuum of Goods," AER.

• (*) Feenstra, R. (2004), Advanced International Trade. Theory

and Evidence. Chapter 1.

• Costinot, Arnaud and I. Komunjer (2008) "What Goods Do

Countries Trade? A Structural Ricardian Model" mimeo MIT.

Differences in Factor Endowments (Heckscher-Ohlin Model)

• (*) Feenstra, R. (2004), Advanced International Trade. Theory

and Evidence. Chapters 1, 2 and 3.

• Jones, R. (1965), "The Structure of Simple General Equilibrium

Models," JPE.

• Bhagwati, J. (1972), "The Heckscher-Ohlin Theorem in the Mul-

ticommodity Case," JPE.

• Helpman, E. (1984), "The Factor Content of Foreign Trade," EJ.

• Romalis, John (2004) “Factor Proportions and the Structure of

Commodity Trade” , American Economic Review, Vol. 94(1),
March 2004, pp.67-97.

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 Monopolistic Competition and Increasing Returns

• (**) Krugman, P. (1980), “Scale Economies, Product Differenti-

ation and the Pattern of Trade,” AER.

• (**) Dixit, Avinash and Joseph Stiglitz (1977), “Monopolis-

tic Competition and Optimum Product Diversity.” American Eco-
nomic Review 67:297—308.

• Krugman, P. (1979) “Increasing Returns, Monopolistic Competi-

tion, and International Trade,” JIE.

• (*) Helpman, H. and P. Krugman (1985), Market Structure and

Foreign Trade, Cambridge, MIT Press, chapters 6-9.

• Feenstra, R. (2004), Advanced International Trade. Theory and

Evidence. Chapter 5.

2 Firm Heterogeneity and International Trade

2.1 Basic models
• (**) Eaton, J. and S. Kortum (2002), "Technology, Geography
and Trade," Econometrica, September 2002, Vol. 70, No. 5, 1741-
1780.

• (**) Melitz, Marc J. (2003), “The Impact of Trade on Intra-

Industry Reallocations and Aggregate Industry Productivity,” Econo-
metrica, 71:6, pp. 1695-1725.

• (**) Chaney, Thomas (2008), “Distorted Gravity: Heterogeneous

Firms, Market Structure and the Geography of International Trade,”
American Economic Review, September 2008, Vol. 98, No. 4.

• (*) Bernard, Andrew B., Stephen Redding, Peter K. Schott

(2007), “Comparative Advantage and Heterogeneous Firms,” Re-
view of Economic Studies, vol 74, January.

• (*) Arkolakis, Costas (2008), "Market Penetration Costs and

the New Consumers Margin in International Trade," NBER work-
ing paper 14214

6
 • (*) Donaldson, Dave (2010), “Railroads of the Raj: Estimating
the Impact of Transportation Infrastructure,” mimeo MIT.
• (*) Armenter, Roc and Miklós Koren (2009), "Economies of
Scale and the Size of Exporters," mimeo, Central European Uni-
versity.
• (*) Arkolakis, Costas, P. Klenow, S. Demidova and A, Rodriguez-
Clare (2008), "The Gains from Trade with Endogenous Variety"
American Economic Review Papers and Proceedings, 98 (4), 444-
450 and NBER working paper 13933.
• Arkolakis, Costas, Arnaud Costinot and A, Rodriguez-Clare
(2008), "New Theories, Same Old Gains?", mimeo MIT.
• Hsieh, Chang-Tai and Ralph Ossa, mimeo (coming soon) Chicago
Booth.
• Alvarez, Fernando and Lucas, Robert Jr. (2007) "General equi-
librium analysis of the Eaton-Kortum model of international trade,"
Journal of Monetary Economics, Elsevier, vol. 54(6), pages 1726-
1768, September.
• Hopenhayn, Hugo (1992), "Entry, Exit, and Firm Dynamics in
Long Run Equilibrium," Econometrica, 60: 621-653.
• Yeaple, S. (2004), "A Simple Model of Firm Heterogeneity, Inter-
national Trade and Wages," Journal of International Economics.

2.2 Adjustable mark-ups

• (**) Bernard, A.B., J. Eaton, J.B. Jensen and S. Kortum
(2003), “Plants and Productivity in International Trade”, Ameri-
can Economic Review, Vol. 93, No. 4, September, pp. 1268-1290.
• (**) Melitz, Marc and Gianmarco Ottaviano (2008), “Market
Size, Trade and Productivity”, Review of Economic Studies, Black-
well Publishing, vol. 75(1), pages 295-316, 01.
• (*) Atkeson, Andrew and Ariel Burstein (2008) “Pricing to
Market, Trade Costs, and International Relative Prices,” American
Economic Review, December 2008.
• Vogel, Jonathan (2008) “Spatial Competition with Heterogeneous
Firms,” Journal of Political Economy, Volume 116, Number 3,
June 2008.

7
 • Auer, Raphael and Thomas Chaney (2009), "Exchange Rate
Pass-Through in a Competitive Model of Pricing-to-Market," Jour-
nal of Money, Credit and Banking, February 2009, Vol. 41, No.
s1.

• Helpman, H. and P. Krugman (1985), Market Structure and

Foreign Trade: Chapter 6 (page 119).
• Dornbusch, Rudiger. (1987) “Exchange Rates and Prices.” Amer-
ican Economic Review, 77, 93–106.

2.3 Multi-product firms

• (**) Bernard, Andrew B., Stephen Redding, Peter K. Schott
(2009), “Multi-product Firms and Product Switching,” AER.
• (**) Melitz, Marc J., Thierry Mayer and Gianmarco Otta-
viano, (2009), "Market size, Competition, and the Product Mix
of Exporters", mimeo.
• Bernard, Andrew B., Stephen J. Redding and Peter K. Schott,
2006. "Multi-Product Firms and Trade Liberalization," NBER
Working Papers 12782.
• Bernard, Andrew B., J. Bradford Jensen, Stephen J. Redding
and Peter K. Schott, (2009). "The Margins of US Trade," Amer-
ican Economic Review, vol. 99(2), pages 487-93, May.

2.4 Empirics
The extensive margin of trade:
• (**) Eaton, Jonathan, Samuel Kortum, and Francis Kramarz
(2008), “An Anatomy of International Trade: Evidence from French
Firms” NBER Working Paper #14610.
• (**) Helpman, E., M. Melitz and Y. Rubinstein (2008), “Trad-
ing Partners and Trading Volumes,” Quarterly Journal of Eco-
nomics, Vol. 123, May 2008, pp. 441-487.
• (*) Broda, Christian and David Weinstein (2006), “Globaliza-
tion and the Gains from Variety,” Quarterly Journal of Economics,
May 2006, Vol. 121, No. 2, pp. 541-585.

8
• (*) Alessandria, George, Joe Kaboski and Virgiliu Midrigan
(2009), "Inventories, Lumpy Trade, and Large Devaluations," AER
(forthcoming).

• Hummels and Klenow (2005), "The Variety and Quality of a

Nation’s Exports," American Economic Review 95, June 2005,
704-723.

Firm/plant level productivity:

• Olley, S. and A. Pakes (1996), "The dynamics of productivity

in the telecommunications equipment industry," Econometrica.

• Levinsohn, J. and A. Petrin (2003), "Estimating production

functions using intermediate inputs to control for unobservables,"
ReStud.

• (**) De Loecker, Jan (2007), "Do Exports Generate Higher Pro-

ductivity? Evidence from Slovenia," Journal of International Eco-
nomics, 73, September 2007, 69–98.

• (**) Pavcnik, N. (2002), “Trade Liberalization, Exit, and Produc-

tivity Improvements: Evidence from Chilean Plants”, The Review
of Economic Studies 69, January 2002, pp. 245-76.

• De Loecker, Jan (2009), "Product Differentiation, Multi-Product

Firms and Estimating the Impact of Trade Liberalization on Pro-
ductivity," NBER WP # 13155.

• Tybout, James (2001), “Plant- and Firm-level Evidence on the

’New’ Trade Theories” ( in E. Kwan Choi and James Harrigan, ed.,
Handbook of International Trade, Oxford: Basil-Blackwell, 2003,
and NBER Working Paper No. 8418).

• Clerides, S., S. Lach and J. Tybout (1998), “Is learning by

exporting important? Micro-dynamic Evidence from Colombia,
Mexico, and Morocco”, Quarterly Journal of Economics, 113 (3),
903-47.

• Bernard, A.B. and J.B. Jensen (1999), “Exceptional Exporter

Performance: Cause, Effect, or Both?” Journal of International
Economics, 47(1), 1-25.

9
 • Bernard A. and J. B. Jensen (2004), “Why Some Firms Export”,
The Review of Economics and Statistics, Vol. 86, No. 2.

• Bernard, Andrew, 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 No.
11404.

3 The Size Distribution of Firms

• (**) Simon H. and C. Bonini (1958), "The Size Distribution of
Business Firms." American Economic Review, 48(4): 607-617.

• Yule, G. U. (1925). "A Mathematical Theory of Evolution, based

on the Conclusions of Dr. J. C. Willis, F.R.S.". Philosophical
Transactions of the Royal Society of London, Ser. B 213: 21–87.

• (*) Sutton, J. (1997), "Gibrat’s Legacy." Journal of Economic

Literature 35(1): 40-59.

• (*) Sutton, John (2002), “The Variance of Firm Growth Rates:

The Scaling Puzzle”, Physica A, vol. 312, September 2002.

• (*) Axtell, R.L. (2001), "Zipf distribution of U.S. firm sizes,"

Science, 293: 1818-20.

• (**) Gabaix, Xavier. (1999), "Zipf’s law for cities," Quarterly

Journal of Economics 144: 739-767.

• Arkolakis, Costas. (2008), "Market penetration costs and trade

dynamics," mimeo Yale University.

• Rossi-Hansberg, Esteban and Mark L. J. Wright (2007), "Es-

tablishment Size Dynamics in the Aggregate Economy," December
2007, American Economic Review, 97:5, 1639-1666

• Chatterjee, Satyajit and Esteban Rossi-Hansberg (2008), "Spin-

offs and the market for ideas," mimeo Princeton University.

• Kortum, Sam (1997), "Research, Patenting, and Technological

Change", Econometrica, 65(6), 1997, 1389-1419.

• (**) Eaton, Jonathan, and Sam Kortum (1999), "International

Technology Diffusion: Theory and Measurement," International
Economic Review, 40(3), 1999, 537-570.

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 • di Giovanni, Julian and Andrei Levchenko (2009), "Interna-
tional Trade and Aggregate Fluctuations in Granular Economies,"
RSIE Discussion Paper 585 .

Measurement issues:
• (*) Gabaix, Xavier and Rustam Ibragimov (2009), "Rank-1/2:
A Simple Way to Improve the OLS Estimation of Tail Exponents",
forthcoming, Journal of Business Economics and Statistics.
• (*) Gabaix, Xavier, Hernan Makse, Hernan Rozenfeld and
Diego Rybski(2009)."The Area and Population of Cities: New
Insights from a Different Perspective on Cities," mimeo NYU.

4 International Trade and Labor Markets

• (**) Matsuyama, Kiminori (2007), "Beyond Icebergs: Towards A
Theory of Biased Globalization, " The Review of Economic Stud-
ies, 74 (January 2007): 237-253.
• (*) Helpman, Elhanan, Oleg Itskhoki and Stephen Redding
(2009), "Inequality and Unemployment in a Global Economy,"
mimeo Princeton.
• Helpman, Elhanan, Oleg Itskhoki and Stephen Redding (2009),
"Unequal Effects of Trade on Workers with Different Abilities,"
mimeo Princeton.
• Helpman, Elhanan and Oleg Itskhoki (2009), "Labor Market
Rigidities, Trade and Unemployment," mimeo Princeton.
• (*) Costinot, Arnaud and Jonathan Vogel (2009), "Matching
and Inequality in the World Economy", mimeo MIT.
• Davis, Donald and James Harrigan (2008), "Good Jobs, Bad
Jobs, and Trade Liberalization" mimeo Columbia.
• Verhoogen, Eric (2008), “Trade, Quality Upgràding and Wage
Inequality in the Mexican Manufacturing Sector,” QJE.
• Bustos, Paula (2007), “The Impact of Trade on Technology and
Skill Upgrading: Evidence from Argentina,” mimeo CREI.
• Frias, Judith A., David S. Kaplan and Verhoogen, Eric (2009),
“Exports and Wage Premia: Evidence from Mexican Employer-
Employee Data.” mimeo Columbia.

11
5 Multinational Firms and Production
5.1 Technology driven FDI
• Markusen, James R. (2002), Multinational Firms and the Theory
of International Trade, Cambridge, MA: MIT Press.

The Proximity Concentration Trade-Off

• Markusen, James R. (1984), “Multinationals, Multi-Plant Economies,

and the Gains from Trade,” Journal of International Economics,
16, pp. 205-226.

• Markusen, James R. (1995), “The Boundaries of Multinational

Enterprises and the Theory of International Trade,” Journal of
Economic Perspectives, 9:2, pp. 169-189.

• (*) Brainard, S. Lael (1997), “An Empirical Assessment of the

Proximity-Concentration Trade-off Between Multinational Sales
and Trade,” American Economic Review, 87:4, pp. 520-544.

• Markusen J. and A. Venables (1998): “Multinational Firms

and the New Trade Theory”, Journal of International Economics,
46(2), 183-203.

• Markusen, James R. and Anthony J. Venables (2000), “The

Theory of Endowment, Intra-industry and Multi-national Trade,”
Journal of International Economics, 52, pp. 209-234.

• (**) Helpman, Elhanan, Marc J. Melitz, and Stephen R.Yeaple

(2004), “Exports versus FDI with Heterogeneous Firms,” American
Economic Review, 94:1, pp. 300-316.

Vertical FDI

• (**) Helpman, Elhanan (1984), “A Simple Theory of International

Trade with Multinational Corporations”, Journal of Political Econ-
omy, 92:3, pp. 451-471.

• Garetto, Stefania (2009), "Input Sourcing and Multinational

Production," mimeo Boston University.

• (*) Yi, Kei-Mu (2003), “Can Vertical Specialization Explain the

Growth of World Trade?” Journal of Political Economy, 111:1,
pp.52-102.

12
 • Hanson G., R. Mataloni and M. Slaughter (2001), "Expan-
sion Strategies of US Multinational Firms," in Dani Rodrik and
Susan Collins (eds) Brookings Trade Forum 2001.

5.2 Refresher: the Theory of Organizations

• Coase, Ronald H. (1937), “The Nature of the Firm,” Economica,
4:16, pp. 386-405.

• (**) Grossman, Sanford J., and Oliver D. Hart (1986), “The

Costs and Benefits of Ownership: A Theory of Vertical and Lateral
Integration,” Journal of Political Economy, 94:4, pp. 691-719.

• (*) Holmstrom Bengt and Paul Milgrom (1994), “The Firm

as an Incentive System,” American Economic Review, 84:4, pp.
972-991.

• (*) Aghion, Philippe and Jean Tirole (1997), “Formal and Real
Authority in Organizations,” The Journal of Political Economy,
Vol. 105, No. 1, pp. 1-29.

• Tirole, Jean (1988), The Theory of Industrial Organization, Cam-

bridge: MIT Press. Chapter 1.

5.3 The International Boundaries of Firms

• (**) Antras, Pol (2003), “Firms, Contracts, and Trade Struc-
ture,” Quarterly Journal of Economics, 118 (4), pp. 1375-1418.

• (**) Antras, Pol (2005), “Incomplete Contracts and the Product

Cycle,”American Economic Review, Vol. 95, No. 4, pp. 1054-1073.

• (*) Antras, Pol and Elhanan Helpman (2004), “Global Sourc-

ing,” Journal of Political Economy, 112:3, pp. 552-580.

• Grossman, G.M. and Helpman, E. (2002), “Integration vs. Out-

sourcing in Industry Equilibrium,” Quarterly Journal of Economics
117 (1), 85-120.

• Grossman, G.M. and Helpman, E. (2005), “Outsourcing in a

Global Economy,” Review of Economic Studies, 72:1, pp. 135-159.

13
5.4 Offshoring of production
• (*) Antras, Pol, Luis Garicano and Esteban Rossi-Hansberg
(2006), “Offshoring in a Knowledge Economy,” Quarterly Journal
of Economics, February 2006.

• (*) Grossman, Gene M. and Esteban Rossi-Hansberg (2009),

"Trading Tasks: A Simple Theory of Offshoring," December 2008,
American Economic Review, 98:5, 1978–1997.

• Grossman, Gene M. and Esteban Rossi-Hansberg (2009), "Task

Trade between Similar Countries," mimeo Princeton.

• (*) Nocke, Volker and Stephen Yeaple (2004), “An Assignment

Theory of Foreign Direct Investment,” mimeo UPenn.

• Rossi-Hansberg, Esteban (2005), “A Spatial Theory of Trade,”

American Economic Review, 95:5, pp. 1464-1491.

6 Historical Landmarks - Institutions and Trade

Some historical landmarks in international macro:

• (**) Dornbusch, Rudiger (1976), "Expectations and Exchange

Rate Dynamics," The Journal of Political Economy, Vol. 84, No.
6. (Dec., 1976), pp. 1161-1176.

• (*) Salant, Stephen W. and Dale W. Henderson (1978), "Mar-

ket Anticipations of Government Policies and the Price of Gold,"
The Journal of Political Economy, Vol. 86, No. 4. (Aug., 1978),
pp. 627-648.

• (*) Krugman, Paul (1979), "A Model of Balance-of-Payments

Crises," Journal of Money, Credit and Banking, Vol. 11, No. 3.
(Aug., 1979), pp. 311-325.

Institutions and trade:

• Grossman, Gene M. and Giovanni Maggi (2000), “Diversity and

Trade,” American Economic Review, 90:5, pp. 1255-1275.

• Costinot, Arnaud (2009), "On the Origins of Comparative Ad-

vantage," Journal of International Economics, 2009, vol. 77, issue
2, pages 255-264

14
• Do, Quy-Toan and Andrei Levchenko (2009), "Trade, Inequal-
ity, and the Political Economy of Institutions," Journal of Eco-
nomic Theory, 144:4 (July 2009), 1489-1520.

• Levchenko, Andrei (2007), “Institutional Quality and Interna-

tional Trade,” Review of Economic Studies, 74:3 (July 2007), 791-
819.

15