The recent theoretical literature has suggested that increasing returns to scale are necessary to account for the volume of intraindustry trade among developed economies. The present paper shows that such trade can arise quite naturally in a setting with constant returns to scale. ; An example...

This paper develops a simple framework for examining human capital accumulation, unemployment, and relative wages in a global economy. It builds on the models of Davis (1998a, b) of trade between a flexible-wage America and a rigid-wage Europe. To this it adds a model of human capital...