The authors 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 factors to move internationally. The authors characterize equilibria in which...

This paper analyzes a model of economic development in which international differences in industrial structure and income are caused by the agglomeration of industry in a subset of countries. Economic development may not be a gradual process of convergence by all countries but instead involve...

This paper develops a model of international trade between economies which each contain a monopolistically-competitive industry producing differentiated products under increasing returns to scale. Firms have larger shares in their domestic market than in their export market and the implications...