by an intriguing puzzle – the large gap between the theory and empirical work. While the hypothesis that growing labor … consistent evidence in support of this theory. The primary contribution of this chapter is to document how recent research … – primarily since the late 1990s – makes substantial progress in resolving this disconnect between the theory and empirics. To …

data. Three lessons stand out. First, competitive and new trade theory models are complementary rather than competing ways …. -- testing and estimation of neoclassical trade theory …