"Mundell and Markusen each wrote classic papers on the relationship between trade and factor movement. Mundell showed that substitution holds in the Heckscher-Ohlin model. Markusen challenged the substitution result and showed in five different models that removing barriers to factor movement...

"To study the effects of tariffs on gross domestic product (GDP), one needs import demand elasticities at the tariff line level that are consistent with GDP maximization. These do not exist. Kee, Nicita, and Olarreaga modify Kohli's (1991) GDP function approach to estimate demand elasticities...

How firms react to a given shock may depend on the degree to which rivals are present and on whether potentially viable entrants to that market exist. A preferred supplier market presence and threat of entry lessen a nonmember country's price reaction to most-favored-nation trade liberalization...