Fall 2013Princeton UniversityDepartment of EconomicsECONOMICS 551: INTERNATIONAL TRADE ITTh: 10:40 – 12:10317 Bendheim HallInstructor:Gene Grossman 300 Fisher Hall, ext. 4823 email: [email protected]Content:This course will cover competitive trade theory, including the gains from trade, the sources of comparative advantage, the effects of trade on income distribution, trade with external economies, and the theory of trade policy.Books:There are no required textbooks. The following books are cited in the reading list by the abbreviations indicated. Some copies of these books are available for purchase in Labyrinth; those intending to do research in this field may want to have them in their personal libraries.Avinash Dixit and Victor Norman, Theory of International Trade(DN)Robert Feenstra, Advanced International Trade: Theory and Evidence(F)Elhanan Helpman and Paul R. Krugman, Market Structure and Foreign Trade (HK)COURSE OUTLINE AND READING LISTEssential items should be read beforethe lecture on the topic. Required items should be read shortly thereafter.I. GAINS FROM COMPETITIVE TRADEEssential:DN pp. 65-79F, pp.179-188Required:A. Dixit and V. Norman, “Gains from trade without lump-sum compensation,” JIE 1986, 111-122A. Deardorff, “The general validity of the law of comparative advantage,” JPE 1980, 941-957D. Bernhofen and J. Brown, “An empirical assessment of the comparative advantage gains from trade: Evidence from Japan,” AER 2005, 208-225.