This paper presents ex post decomposition analysis of wage inequality change using multi-sector general equilibrium models. The analytical structure used is a specific- factors model of trade, which we calibrate to UK data for the two years 1979 and 1975. We first calibrate our general...

On the eve of a major change in the world monetary system, the adoption of a single currency in Europe, our theoretical understanding of the implications of the exchange rate regime for trade and capital flows is still limited. We argue that two key model ingredients are essential to address...

Primary commodities are used as inputs into all production processes, yet they account for approximately 16 percent of world trade. Despite their share in trade, we show that the aggregate gains from trade are largely understated if we ignore key features of commodities: low price elasticities...

Applied general equilibrium (AGE) models, which feature multiple countries, multiple industries, and input-output linkages across industries, have been the dominant tool for evaluating the impact of trade reforms since the 1980s. We review how these models are used to perform policy analysis and...

Transportation costs are an important topic in international trade, but seldom have researches paid attention to general equilibrium trade modelling with transportation costs and explored their relevant effects. This paper uses different numerical general equilibrium trade model structures to...

We provide an equilibrium analysis of the efficiency properties of bilateral tariff negotiations in a three-country, two-good general equilibrium model of international trade when transfers are not feasible. We consider "weak-rules" settings characterized by two cases: a no-rules case in which...

We study a non-parametric class of neoclassical trade models with global production networks and arbitrary distortions. We characterize their properties in terms of sufficient statistics useful for growth and welfare accounting as well as for counterfactuals. Using these sufficient statistics,...

We study models of credit with limited commitment, which implies endogenous borrowing constraints. We show that there are multiple stationary equilibria, as well as nonstationary equilibria, including some that display deterministic cyclic and chaotic dynamics. There are also stochastic...

This paper develops a simple model of international trade with intermediation. We consider an economy with two islands and two types of agents, farmers and traders. Farmers can produce two goods, but in order to sell these goods in centralized (Walrasian) markets, they need to be matched with a...

International trade economists made seminal contributions to general equilibrium theory, moving away from an emphasis on existence of equilibrium to algebraic formulations which enabled us to characterize key relationships between parameters and variables, such as that between tariffs and...