Economist Marc J. Melitz will return from Princeton next year to a Harvard Economics Department short on faculty.

Melitz—a former associate and assistant professor at Harvard who now teaches in Princeton’s economics department and Woodrow Wilson School—is well-known for his work on international trade.

“He’s been the most influential international trade economist since Paul Krugman,” said economics professor Pol Antràs, who worked with Melitz during his time at Harvard.

Melitz’s influence on the study of international trade began with his graduate thesis at the University of Michigan. In that paper, he built a conceptual framework for international trade that focused on decisions of individual firms and their entrance into the market.

Melitz’s firm-level approach to international trade has provided a way to predict aggregate trade flows, which Antràs said “have been confirmed in the data and were highly non-intuitive given the frame of models that we used to work with.”

That approach is now “the current workhorse model in international trade,” Antràs said.

Melitz arrived at Harvard in 2000, where he remained until receiving a tenure offer from Princeton.

As an associate professor at Harvard, Melitz taught the intermediate level Economics 1010a: Microeconomic Theory, as well as Economics 1535: International Trade and Investment. He said he plans to teach 1535 next year and 1010a in coming years.

The addition of Melitz will help maintain current course offerings in a department with one of the highest student-to-faculty ratios in the Facultyof Arts and Sciences. In the past year, the department has faced a shortage of faculty, leading to the cancellation of smaller courses like Junior Seminars. Department Chair James H. Stock said that with the addition of Melitz, the department’s size “will be approximately constant for this year.”

Course offerings are unlikely to see much growth because of FAS financial restrictions on visiting faculty and because some faculty members are on temporary leave to work in Washington under President Barack Obama.

Melitz was offered the position at Harvard two years ago, before the financial crisis and FAS constraints on new hires, Stock said. Melitz said he waited to accept the offer in part because of family considerations.

His decision to leave Princeton to join the Harvard economics department highlights the rivalry between the two departments—two of the best in the nation.

“Obviously this is going to tilt the scale somewhat,” said economics Professor Elhanan Helpman, who also specializes in international trade.

“They took him from us, so we are entitled to take him from them,” he said.

—Staff writer Noah S. Rayman can be reached at nrayman@fas.harvard.edu.

—Staff writer Elyssa A.L. Spitzer can be reached at spitzer@fas.harvard.edu.