This paper develops two extensions of the dynamic model presented in Melitz (2003). The first extension consists in the introduction of technology choice between three alternative production technologies: L, M and H. L is assumed to be the same as Melitz's single production technology, while M...

In the two-country Melitz (2003) model, unilateral trade liberalization is often cast as a reduction of iceberg transportation costs and wages are determined by a linear outside sector. We show that welfare results reverse when wages adjust and trade frictions are revenue-generating tariffs.

Leveraging the power of trade to expand formal employment opportunities, general greater value addition, assist diversification processes and develop productive capabilities is an aspiration of all Commonwealth governments. These objectives were conveyed clearly at the Commonwealth Trade...

This paper examines data on trade flows between West German Bundesländer (federal states) and East Germany to explore the effect of national borders on trade. Although the data cover only a small fraction of intra-German trade flows, I find a home bias of about factor 2.2; West German shipments...

Seit der zweiten Hälfte der 90er Jahre wird das Wachstum in Ostdeutschland zunehmend vom Außenhandel getragen. Dabei lagen in den vergangenen zehn Jahren die Exportzuwächse der neuen Bundesländer – ausgehend von einem niedrigen Niveau – deutlich über den Zuwächsen in Westdeutschland....

Has the labor share declined? And what is the impact of international trade? These questions are not only relevant in an international context they also matter for understanding the regional distribution of incomes in a given country. In this paper, we study two regions with trade exposures that...