What are the consequences of international trade on income inequality---measured as the relative wage of skilled to unskilled workers, the skill premium? To address this question we formulate a multi-country model of international trade that introduces skill intensity differences across firms...

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Inequality is shaped by complementarities between worker characteristics and the characteristics of technology, capital, firms, and industries. International trade affects the state of technology, the stocks of different types of capital, and the allocation of labor across firms and industries....

We explore the quantitative importance of pricing complementarities in the context of a menu cost model of price adjustment. Using super-market scanner data, we document new evidence on the co-movement of prices and market shares at the product level, suggesting that changes in prices and market...

We study the impact of the increase in trade in manufacturing on the synchonization of international business cycles

This paper argues that the primary force behind the large fall in real exchange rates that occurs after large devaluations is the slow adjustment in the price of nontradable goods and services. Our empirical analysis is based on data from four large devaluation episodes: Mexico (1994), Korea...

We study the response of factor allocation and the skill premium to trade liberalizations in a model that combines exogenous determinants of comparative advantage--that result from sectoral productivity and factor endowment differences across countries--with endogenous determinants of...