Quantifying the welfare effects of trade liberalization is a core issue in international trade. Existing frameworks … quantitative trade framework which explicitly models labor market frictions. To illustrate, we assess the effects of trade and … labor market reforms for 28 OECD countries. Welfare effects of trade agreements are magnified when accounting for employment …

of trade liberalization. This paper is the first one to address productivity leapfrogging between two countries using a … heterogeneous firms trade framework. In the model, firms' R&D investments determine their expected productivity draw. In one country … firms face lower R&D costs. Before trade liberalization, the sector productivity and the competition intensity is higher in …