The incremental innovations that underly much of modern economic growth typically involve changes to one or more components of a complex product. This creates a tension. On the one hand, a principal would like an agent to contribute innovative components. On the other hand, ironing out...

The Canada-U.S. Free Trade Agreement (FTA) was expected to reallocate workers from high-cost firms to low-cost firms, thus promoting specialization and trade creation. Instead, employment contracted across all industries during 1989-93 and real exports and imports contracted over most of the...

Within developing and newly industrialized countries, rising wage inequality is both common and highly correlated with export growth. This is incompatible with the Stolper-Samuelson theorem, but suggestive of a role for technological catch-up. We develop this insight using a model that features...

Increasingly, a small number of low-wage countries such as China and India are involved in innovation - not the `big ideas', but the constant incremental innovations needed to stay ahead in business. We provide some evidence of this and develop a model in which there is a transition from...

The Canada-U.S. Free Trade Agreement (FTA) provides a unique windowonto the effects of a reciprocal trade agreement on an industrializedeconomy (Canada). For industries that experienced the deepest Canadiantariff cuts, employment fell by 12 percent and labour productivity rose by 15percent as...

Increasingly, a small number of low-wage countries such as China and India are involved in incremental innovation. That is, they are responsible for resolving production line bugs and suggesting product improvements. We provide evidence of this new phenomenon and develop a model in which there...

Increasingly, a small number of low-wage countries such as China and India are involved in innovation -- not 'big ideas' innovation, but the constant incremental innovations needed to stay ahead in business. We provide some evidence of this new phenomenon and develop a model in which there is a...

Each worker brings a bundle of skills to the workplace, for example, quantitative and communication skills. Since employers must take this bundle as a package deal, they choose workers with just the right mix of skills. We show that international differences in the distribution of worker skill...

Trade theorists continue to puzzle over their surprisingly small estimates of the impact of trade liberalization o n imports. All explanations of the puzzle treat trade liberalization as a given but the level of trade protection is not exogenous. The theo ry of endogenous protection predicts...

Increasingly, a small number of low-wage countries such as China and India are involved in incremental innovation. That is, they are responsible for resolving production-line bugs and suggesting product improvements. We provide evidence of this new phenomenon and develop a model in which there...