We develop a new general equilibrium model of trade with heterogeneous firms, variable demand elasticities and endogenously determined wages. Trade integration favors wage convergence, intensifies competition, and forces the least efficient firms to leave the market, thereby affecting aggregate...

The global financial crisis and the subsequent uneven recovery have underscored the need for Africa's resilience to output and other shocks originated in the rest of the world. A comparison of two regional economic communities – the East African Community (EAC) and the Southern Africa Customs...

Acknowledging that individuals dislike having low relative income renders trade less attractive when seen as a technology that integrates two economies by merging separate social spheres into one. We define a "trembling trade" as a situation in which gains from trade are less than losses in...

We discuss the effects of offshoring on the labor market in a matching model with endogenous adjustment of educational skills. We carry out a comparative statics analysis and show that offshoring leads to a restructuring of the economy through skill-biased technical change (SBTC) where overall...

The COVID-19 pandemic has disrupted trade and global value chains. Small open economies such as Portugal are particularly vulnerable. In this paper we consider the impact of the pandemic on the country's exports, arguing that an export-led recovery is possible. The challenge is to identify...

I document that emerging markets have cast off their “original sin” – their external liabilitiesare no longer dominated by foreign-currency debt and have instead shifted sharply towardsdirect investment and portfolio equity. Their external assets are increasingly concentrated inforeign...

We document the recent phenomenon of uphill flows of capital from nonindustrial toindustrial countries and analyze whether this pattern of capital flows has hurt growth innonindustrial economies that export capital. Surprisingly, we find that there is a positivecorrelation between current...

In theory, one of the main benefits of financial globalization is that it should allow for moreefficient international risk sharing. In this paper, we provide a comprehensive empiricalevaluation of the patterns of risk sharing among different groups of countries and examinehow international...

China's remarkable run of persistently high growth in recent decades is all the more stunning in light of the country's low levels of financial and institutional development, state-dominated economy, and nondemocratic government. Notwithstanding the inefficient and risky growth model, the...