The effects of geography and productivity on the global pattern of production are captured here in a specific factors … gravity model. Simple enough for sharp results, the model is yet rich enough to contain the high dimensional productivity … productivity frictions inferred from gravity. Sellers' and buyers' incidence both reduce real income. Sellers' incidence shocks …

across countries and sectors. On the other hand, opening to trade boosts individual firms' productivity growth, via a number … of channels, and also enhances allocative efficiency across firms, in turn increasing aggregate productivity growth. One …

across countries and sectors. On the other hand, engaging in trade boosts individual firms' productivity growth via a number … of channels and enhances allocative efficiency across firms, in turn increasing aggregate productivity growth. One of the …