This paper embeds a principal-agent firm in an otherwise standard trade model a la Melitz (2003) to investigate the … less productive firms use a lowered- powered one. International trade within an industry enhances market competition … international trade on firms that differ in their exporting status and pay structure result in more prevalence of high …

frictions, and foreign trade. This framework emphasizes firm heterogeneity and search and matching frictions in labor markets …. It implies that the opening of trade may raise inequality and unemployment, but always raises welfare. Unilateral … country's trade partner. Unemployment benefits can alleviate the distortions in a country's labor market in some cases but not …

Firms face competing needs to expand product variety and reduce production costs. Trade policy affects firm investments … recapture these lost markups. I provide a theory detailing this conflicting impact of trade policy and address welfare gains … from trade. Accounting for firm heterogeneity, I show support for the theoretical predictions with firm-level innovation …

This paper analyzes the impact of trade integration on wage inequality when there is heterogeneity across both workers … premium. Under trade, fixed export costs cause the selection of high productivity, high skill firms into exporting and an … caused by trade liberalization results from technology upgrading by new exporters. …

When will reducing trade barriers against a low wage country cause innovation to increase in high wage regions like the … producing old goods. Trade liberalization with a low wage country reduces the profitability of old goods and so the opportunity … offers a new mechanism for positive welfare effects of trade liberalization over and above the standard benefits of …

Since changes in trade openness are typically confounded with other factors, it has been difficult to identify the … labor market consequences of increased international trade. The advent of the United States Interstate Highway System … provides a unique policy experiment, which I use to identify the effect of reducing trade barriers on the relative demand for …

middle educated workers. Trade openness is also associated with polarization, but this is not robust to controls for …

particular, and in contrast with estimates of the trade effect of other currency unions, we find that the impact of the euro on … trade has been close to zero. After reviewing the costs and benefits, we conclude with some open questions on normative and …