We argue that the welfare gains from trade in new models with micro-level margins exceed those in frameworks without … these margins. Theoretically, we show that for fixed trade elasticity, different models predict identical trade flows, but … different patterns of micro-level price variation. Thus, given data on trade flows and micro-level prices, different models have …

Quantitative results from a large class of structural gravity models of international trade depend critically on the … elasticity of trade with respect to trade frictions. We develop a new simulated method of moments estimator to estimate this … elasticity from disaggregate price and trade-flow data and we use it within Eaton and Kortum's (2002) Ricardian model. We apply …

We build into a Ricardian model sectoral linkages, trade in intermediate goods, and sectoral heterogeneity in … production to quantify the trade and welfare effects from tariff changes. We also propose a new method to estimate sectoral trade … elasticities consistent with any trade model that delivers a multiplicative gravity equation. We apply our model and use our …

In this paper, we empirically investigate how government ideology affects trade policy. The prediction of a partisan … protectionist trade policies in capital rich countries, but adopt more pro-trade policies in labor rich economies than right …

Comparative advantage, whether driven by technology or factor endowment, is at the core of neoclassical trade theory … countries, goods, and factors, generalize and extend many results from the previous trade literature. They also offer new …

relatively more productive. Though one of the most celebrated insights in the theory of international trade, this prediction has … comparative advantage. Using trade and productivity data from 1997, we estimate that, ceteris paribus, the elasticity of bilateral … comparative advantage at the industry level would only lead, on average, to a 5.5% decrease in the total gains from trade. …

Trade policy depends on the extent to which the government wants to redistribute income as well as on a country …, conditional on inequality, left-wing (pro-labor) governments will adopt more protectionist trade policies in capital …-rich countries, but adopt more pro-trade policies in labor-rich economies than right-wing (pro-capital) ones. Also higher inequality …

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 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 … economy domestic trade share and the elasticity of trade with respect to variable trade costs. The measured welfare gains from …