Gravity in International Trade 2400-EN3SL299A
The seminar mainly concerns the analysis of phenomena occurring in foreign trade with the use (as the primary tool) of the gravity model. This model is discussed during classes in Theory of International Exchange. The seminar will attempt to address current issues in foreign trade with particular use of linear gravity models. We invite those who want to explore the specifics of one of the most frequently used analytical tools designed to test foreign trade hypotheses. Your research idea is very welcome. The interested parties will agree on the frequency of meetings.
The seminar should end with the student's preparation of a bachelor thesis, which - after introducing (possible) agreed corrections - can be submitted to the dean's office.
Subject
1. Testing fundamental gravity relationships in trade (i.e. distance, GDP of trading countries, cultural proximity, etc.)
2. Checking the impact of belonging to regional integration groups
3. The use of the gravity model for data on the international activities of companies.
4. Possibility of using panel models and comparison with estimated regression of OLS methods
5. Independent calculation of individual effects using linear regression
6. FDI flows in the context of trade gravity models
7. Influences of trade policy on the value of foreign trade between pairs of countries.
Type of course
Course coordinators
Learning outcomes
A) Knowledge
1. The student knows the basics of gravity models used in analysing foreign trade.
2. The student knows the latest (as well as classical) literature on the issues of gravity models.
3. The student knows the theoretical models of the trade from which the gravity model can be derived.
B) Skills
1. The student can perform an econometric analysis to verify the research hypothesis.
2. The student can analyse data using essential statistical and econometric tools.
3. The student can analyse selected texts from Polish English-language journals in the field of international economics;
4. The student can conduct empirical (statistical or econometric) research on his own
5. The student can formulate research hypotheses and verify them
6. The student can independently develop the structure of work and research
7. The student can formulate partial and synthetic conclusions from the analysis
C) Social competences
1. The student is aware of the need to complete and improve knowledge and skills.
2. The student can present data communicatively in tables and charts.
3. The student is prepared to expand their knowledge on their own.
KW01, KW02, KW03, KU01, KU02, KW03, KK01, KK02, KK03
Assessment criteria
Pass is based on the progress of work in the preparation of the BA thesis.
Completion of the first semester requires the presentation of an initial concept of the thesis and an indication of the main methodological and empirical problems that need to be solved.
In the second semester of the third year, fragments of the bachelor's thesis are discussed and analyzed. Both the progress in empirical research and the development of theoretical or institutional fragments of the BA thesis are assessed. The progress in these works and the quality of the fragments presented are the basis for the assessment of the credit, and the whole BA thesis is the basis for the supervisor's final grade.
Bibliography
1 R.C. Feenstra, Advanced international trade, Princeton University Press, 2016 (chapter 5 and 6)
2. Head, Keith, and Thierry Mayer. "Gravity equations: Workhorse, toolkit, and cookbook." Handbook of international economics. Vol. 4. Elsevier, 2014. 131-195.
3. Anderson, James E., Mario Larch, and Yoto V. Yotov. "GEPPML: General equilibrium analysis with PPML." The World Economy 41.10 (2018): 2750-2782.
4. Weidner, Martin, and Thomas Zylkin. "Bias and consistency in three-way gravity models." Journal of International Economics 132 (2021): 103513.Baier, Scott, and Samuel Standaert. "Gravity models and empirical trade." Oxford Research Encyclopedia of Economics and Finance. 2020.
5. Yotov, Yoto V., Roberta Piermartini, and Mario Larch. An Advanced Guide to Trade Policy Analysis: The Structural Gravity Model. WTO iLibrary, 2016.
Additional information
Additional information (registration calendar, class conductors, localization and schedules of classes), might be available in the USOSweb system: