The standard two-country model of international trade with monopolistic competition predicts a more-than-proportional relationship between a country's share of world production of a good and its share of world demand for that same good, a result known as the "home market effect". We first show...

We study how the supply of environmentalism, which is defined by psychic benefits (costs) associated with the purchase of high-environmental (low-environmental) qualities, affects the way firms choose their products and the ensuing consequences for the global level of pollution. Contrary to...