We investigate the theoretical relationship between trade policy and growth. We use simple versions of some of the most common international trade models to investigate a number of specific mechanisms by which trade liberalization is thought to enhance growth or productivity: improvements in the...

Theories in which firms have heterogeneous productivities, such as those of Melitz (2003) and Chaney (2008), have been successful in capturing this empirical regularity that the average exporting firm is larger than the average nonexporter, but they fail to capture the richness of the...

This appendix contains the original data, constructed data, and full documentation for "Are Shocks to the Terms of Trade Shocks to Productivity?" by Timothy J. Kehoe and Kim J. Ruhl.

We examine the bilateral trade patterns of countries involved in significant trade liberalizations using detailed data on the value of trade flows by commodity. We find a striking relationship between a good's pre-liberalization share in trade and its growth subsequent to liberalization. The...

Detailed macroeconomic data to accompany the article in the Review of Economic Dynamics

We construct a model in which aggregate growth is driven by the continual entry of new firms that face barriers to entry that are exacerbated by financial frictions. We show that economies with more severe financial frictions have lower levels of output and consumption along the balanced growth...

There is a lively debate about the impact of trade liberalization on economic growth measured as growth in real gross domestic product (GDP). Most of this literature focuses on the empirical relation between trade and growth. This paper investigates the theoretical relation between trade and...

More advanced technologies demand higher degrees of specialization – and longer chains of production connecting raw inputs to final outputs. Longer production chains are subject to a “weakest link” effect: they are more fragile and more prone to failure. Optimal chain length is determined...