Most real-world trade liberalizations decrease tariffs and increase quotas without completely abolishing them. We ask how decreases in tariffs and increases in quotas affect productivity in an economy with monopoly rights in the import-competing sector. We show that a reduction in a tariff can...

In the last five years the international macroeconomics literature has become increasingly concerned with global current account imbalances, with particular focus on the size and persistence of the US current account deficit. While much of the recent literature on global imbalances (e.g....

This paper analyzes the cross-country allocation and volume of multinational production, quantifies its barriers, and assesses its impact on welfare. From the patterns of multinational production across countries, three facts stand out: a small fraction of country-pairs engages in multinational...

Why do firms decide to offshore certain parts of their production process? What qualifies certain countries as particularly attractive locations to offshore? In this paper we address these questions with a theory of international production hierarchies in which teams arise endogenously to make...

This paper revisits three features of the data that are widely known: (a) there exists a high correlation between bilateral nominal and real exchange rates; (b) real exchange rate movements are highly persistent; and (c) real exchange rates are highly volatile. The paper attempts a joint, albeit...

This paper studies how the world accommodates emerging giants. That is, as a large country embarks on a transition path that potentially takes it from being a relatively poor country to joining the ranks of the rich, how does the rest of the world adjust in reallocating its scarce resources?...

Developing and newly industrialized countries that have experienced the sharpest increases in wage inequality are those whose export shares have shifted towards more skill-intensive goods. We argue that this can be explained by technological catch-up. We develop this insight using a model that...

The incomplete nature of contracts governing international transactions limits the extent to which the production process can be fragmented across borders. In a dynamic, general-equilibrium Ricardian model of North-South trade, the incompleteness of international contracts is shown to lead to...

The inertia of the local-currency prices of traded goods in the face of exchange-rate changes is a well-documented phenomenon in International Economics.This paper develops a frame-work for identifying the sources of local-currency price stability at each stage of the distribution chain. The...

We perform development decompositions measuring the effect of trade restrictions on TFP and labor productivity. An economy with two tradable and non-storable intermediate goods, used in the production of a non-tradable final good, is assumed. The solution of the static trade and factor...