World Trade Institute, University of Bern “Gravity Models and Panel Econometrics” 21 – 25 September 2020

Course Goals and content Course Content Grading The objective of this course is to serve as a A Trade Theory and the Gravity-Model Class participation (20 %); take-home exam practical guide for trade policy analysis with (80 %). Participants taking this course for 1. The Anderson and van Wincoop and the gravity model offering a balanced credit must attend all lectures and complete the Krugman Model approach between trade theory and econ- the take home exam. 2. The Eaton and Kortum Model metrics. We will discuss recent developments 3 Trade with Heterogeneous Firms in the economic foundation of gravity models 4. Zero Trade and the Helpman-Melitz- and describe best practices for quantifying the Rubinstein Model Organization general equilibrium impact of changes in trade 5. Measuring the Gains from Trade barriers and, especially, trade policies. The course is intended for PhD students. A 6. Universal Gravity limited number of people with relevant

The course is organized in three modules. professional or academic interest may be also Module A concentrates on recent contri- B The Econometrics of Gravity Models of admitted. butions from trade theory that motivate Trade gravity models and form the basis of policy Lecture hours: 24 ECTS : 4 trade policy analysis. The second module will 1. Estimation of Linear High-dimensional take a closer look at the econometric issues of Fixed Effects models the estimation of gravity models and of 2. The Incidental Parameter Problem Timetable and Registration performing policy simulations. Starting point is 3. The Log of Gravity and the PPML - the econometric literature on high-dimen- estimator The course takes place from Monday to Friday sional non-linear panel models and the imple- 3. Time-invariant Variables and in the Silva Casa at the World Trade Institute, mentations in Stata. Lastly, there will be lab Unilateral Trade Barrier Indicators in University of Bern, Hallerstrasse 6, 3012 Bern. sessions, where applications in Stata will be Gravity models discussed and important applied work 3. Constrained PPML-estimation Timetable: published in refereed journals will be 4. Nonlinear Panel models I: Probit replicated. 5. Nonlinear Panel models II: Two-part Monday: 13.30 – 16.00 and 17.00 – 19.30 and Sample Selection Tuesday: 9.30 – 12.00 and 13.30 – 16.00 Wednesday: 9.30 – 12.00 and 13.30 – 16.00 Thursday: 9.30 – 12.00 and 13.30 – 16.00 C Lab-Sessions Lecturer Friday: 9.30 – 12.00 and 13.30 – 16.00 1. Estimating the Trade and Welfare Effects of Brexit This is an intensive course. Please try to 2. Estimating Structural Gravity Models complete some of the readings from the with STATA suggested bibliography before the course 3. Counterfatctual Predictions and GE- begins.

quantifictation of Structural Gravity Models using STATA Tuition fee: 500 CHF.

Available course outlines and reading material Literature can be found under the course listing on the Besides the standard references on gravi- Doctoral Programme webpage.

ty models the course literature inclu- des https://www.wti.org/education/doctoral- "Universal Gravity", C. Arkolakis, T. Allen, programme/#open-84640-phd-courses-and- and Y. Takahashi, 2019 NBER WP summer-school 20787. Forthcoming in Journal of Political Economy. Registration: "New Trade Models, Same Old Gains?" C. Send your application to: Arkolakis, A. Costinot and A. Rodriguez-Clare, 2012. American [email protected] Michael Pfaffermayr is Professor of Inter- Economic Review 102(1), 94-130, national Economics at the University of NBER WP 15628. Innsbruck, Austria and senior researcher at the "The Log of Gravity", Santos Silva, J.M.C. This course is organized in the context of Austrian Institute of Economic Research. and S. Tenreyro, 2006. Review of the Doktoratsprogramme universitäre His research interests comprise empirical Economics and Statistics 88(4), 641- Hochschulen 2017—2020. international trade and applied econometrics, 658. in recent years especially the methodology and "Fixed Effects Estimation of Large-t Panel application of gravity models for trade policy Data Models", Fernández-Val, I., and analysis. M. Weidner, 2018. Annual Review of Economics 10, 109-138. Email: [email protected]