The question here is whether the dynamic effects of opening to trade will increase or decrease comparative advantage. When comparative advantage is based on the abundance or scarcity of something that is costly to acquire, one expects rational behavior to respond to a change in prices by...

I propose a framework that takes a set of conceivable outcomes as the primitive and a prediction is defined by identifying a subset on the set of conceivable outcomes. This notion of predictability serves as an organizing principle for characterizing pattern of trade predictions in single...

This paper examines how country, industry and firm characteristics interact in general equilibrium to determine nations' responses to trade liberalization. When firms possess heterogeneous productivity, countries differ in relative factor abundance and industries vary in factor intensity,...

In 1930 Gottfried Haberler freed the doctrine of comparative advantage from its association with David Ricardo's labor theory of value and provided us with its modern opportunity cost formulation. Haberler's reformulation of comparative advantage revolutionized the theory of international trade...

When there are costs of trade, such as transport or other costs, the pattern of trade may not be well described by the usual measures of comparative advantage, which simply compare a country's costs or autarky prices to those of the world. Instead, a better comparison takes into account the...

I assess the empirical evidence on comparative advantage. I argue that the Heckscher-Ohlin-Vanek (H-O-V) relationship is not a refutable general equilibrium proposition. Consequently, the empirical Heckscher-Ohlin literature has been suffering from the tyranny of nonrefutability. The trade...

Do New York and Nashville face the same pressures from increased trade? This paper considers the role of international trade in shaping the product mix and relative wages for regions within the US. Using the predictions from a Heckscher-Ohlin trade model, we ask whether all the regions in the US...