We argue that the narrative of variety-induced gains from trade in differentiated goods needs revision. If producing differentiated varieties of a good requires differentiated skills and if the work force is heterogeneous in these skills, then firms are likely to have monopsony power. We show...

Zwischen der ökonomischen Theorie und der praktizierten Handelspolitik besteht ein gespanntes Verhältnis. Häufig wird der Theorie unterstellt, sie predige einseitig und unverantwortlich Freihandel, andererseits scheint die Politik diesem Rat ohnehin massiv zu widersprechen. Praktiziert wird...

Dieses Papier präsentiert auf allgemein verständliche Weise die wichtigsten Erkenntnisse der ökonomischen Theorie zu den Wohlfahrtswirkungen von Handelsliberalisierung. Es wird zunächst unilaterale Handelsliberalisierung betrachtet, also Handelsliberalisierung, die nicht über internationale...

This paper first describes the ingredients the present crisis in the euro zone and then evaluates the key options that policy makers face in resolving the crisis and avoiding similar crises in the future. I argue that the crisis should not be seen as caused by government profligacy alone. In...

Economic globalization causes an increasing international fragmentation of value-added chains. A question often raised is whether such outsourcing affects domestic income distribution. The paper provides a theoretical treatment of this issue within a Heckscher-Ohlin framework. It extends beyond...

We investigate the link between productivity of firms and their sourcing behavior. Following Antràs & Helpman (2004) we distinguish between domestic and foreign sourcing, as well as between outsourcing and vertical integration. A firm's choice is driven by a hold-up problem caused by lack of...

We know that euro-area member countries have absorbed asymmetric shocks in ways that are inconsistent with a common nominal anchor. Based on a reformulation of the gravity model that allows for such bilateral misalignment, we disentangle the conventional trade cost channel and trade effects...

This paper scrutinizes the effects of investor-state dispute settlements (ISDS) and national treatment provisions in a two-period model where foreign investment is subject to domestic regulation and a holdup problem. It shows that ISDS can mitigate the holdup problem and increases aggregate...