We consider a Heckscher-Ohlin model in which goods and factors of production can be traded, but trade involves … transactions costs. Goods trade alone will not equalize factor prices, so there is an incentive for trade in factors of production … no trade, there is goods trade only, there is factor trade only, and there is trade in both goods and factors. This …

All preferential trading agreements (PTAs) short of a customs union use Rules of Origin (RoO) to prevent trade … deflection. RoO raise production costs and create administrative costs. This Paper argues that in the case of the recent wave of …

using one particular illustration, the gravity equation for trade, and apply the proposed technique to provide new estimates …

sequential production, in which trade induces a reorganization of production that raises domestic productivity, we show that the …The theoretical result that there are welfare gains from trade is a central tenet of international economics. In a … class of trade models that satisfy a "gravity equation", the welfare gains from trade can be computed using only the open …

The theory of comparative advantage is at the core of neoclassical trade theory. Yet we know little about its … implications for how nations should conduct their trade policy. For example, should import sectors with weaker comparative …

The number of preferential trade agreements has greatly increased over the past two decades, yet most existing … arrangements take the form of free trade areas, and less than ten percent can be considered to be fully fledged customs unions …. This paper develops a political economy model of trade policy under imperfect competition to provide a positive explanation …

attention to the role of firms when discussing international trade. This paper summarizes key differences between trading and … non-trading firms, demonstrates how these differences present a challenge to standard trade models and shows how recent … 'heterogeneous-firm' models of international trade address these challenges. We then make use of transaction-level U.S. trade data to …