We develop a model of international trade with two dimensions of firm heterogeneity and export quality constraints that manifest as higher variable trade costs for lower quality firms. In addition to "productivity", firms are also heterogeneous in their "caliber" -- the ability to develop...

This paper evaluates how much of the economics profession has evaluated the evidence on the relationship between international trade and economic growth. The paper highlights the basic approaches to the trade and growth question that the literature has adopted. The case is made that more...

Empirical studies find substantial differences in demand elasticities and associated markups among products of different quality. This paper analyzes the theoretical determinants of such variation. We present a simple model that allows for horizontal and vertical differentiation and accounts for...

The Heckscher-Ohlin theory links specialization of production to relative factor endowments. Endowments are the result of accumulation in response to economic in-centives. Taking this into account allows us to reconcile wildly di¤erent predictions in the empirical literature about the e¤ect of...

Despite considerable theoretical work predicting that product quality plays an important role in determining the direction of international trade, there is no empirical evidence on the existence and magnitude of such a quality e.ect on trade. In this paper, I provide a framework to estimate the...