In this course we will learn and discuss topics in the intersection of innovation and globalization – two areas that in Economics are typically studied separately. However, in today’s world innovation and globalization are tightly linked: Technological innovation spreads globally and has global impacts, and globalization is often the driver for innovation. At the same time, we have witnessed rapid developments in both globalization and technological change over the past few decades. The world has never been more integrated with respect to trade, foreign direct investment and technology.

The course has a strong empirical focus, especially on the causal estimation of shocks using firm level datasets. During the last part of the course, students present their own research questions and discuss their research designs.

More specifically, we will study three important questions in this course (see below for some selected, preliminary literature):

1. How does globalization affect innovation?
2. What are the roles of globalitaiotn and innovation for the environment?
3. How did important historical innovations affect globalization

The students will study the recent literature in empirical trade, with a focus on topics related to innovation and the environment. I will first show the different frameworks that explain in which way trade may affect innovation within firms, and then discuss some empirical papers studying this question. We will finish with an overview and discussion of common pitfalls in empirical studies.

The second part studies the effect of economic growth and globalization on environmental outcomes, and how innovation can alleviate these effects. We will cover papers that estimate these relationships and the macro and micro level, and how trade and environmental policies affect them.

In the third part of the course we study historical innovations, and the effect they had on economic growth and globalization, mostly during the first wave of globalization (mid-19th century to WW1).

Attendance is required.

Before the course, students are required to read six papers, and hand in written answers (3-4 pages) to problem sets that are provided for each of these papers. During the course, I will cover an overview of the literature, and we will then discuss the answers to the problem sets in class.

On one afternoon of the course, students get the opportunity to present their own research questions and discuss their research designs. Other students are expected to participate in the discussion of the research design, and I will also provide feedback.

After the course, each students gets assigned to write a 3-page referee report to a paper related to, but not discussed in the course. I will also provide a guideline on how to write referee reports. The referee reports are to be handed in a few weeks after the course ends.

The grade consists of two parts:

• 50%: Grade of the handed in problem sets (all of them have to be handed in; one of them is randomly chosen to be graded)
• 50%: Grade for the referee report that is to be handed in after class

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A course in advanced applied econometrics is highly recommended. A course in international economics is useful.