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We study, both theoretically and empirically, how trade imbalances affect the structure of countries exports and wage inequality. We show that, in a Heckscher-Ohlin model with a continuum of goods, a Southern (Northern) trade surplus leads to an increase (reduction) in the average skill...
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I formulate a structural gravity model with monopolistic competition to measure the impact of manufacturing trade imbalances on aggregate measured productivity. Like in a Ricardian model la Dekle, Eaton and Kortum (2007), trade de cits lead to a bene cial terms-of-trade improvement, but this...
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