We propose a short-run theory of the extensive margins of trade, comprising the standard international extensive margin and a novel domestic extensive margin. The domestic extensive margin allows identification of globalization and specific policy effects not properly identified in previous...

We review a recent body of theoretical work that aims to put numbers on the consequences of globalization. A unifying theme of our survey is methodological. We rely on gravity models and demonstrate how they can be used for counterfactual analysis. We highlight how various economic...