A large body of empirical research finds that a pair of regions within a country tends to trade 10 to 20 times as much as an otherwise identical pair of regions across countries. In the context of the standard trade models, the large "border effect" is problematic, because it is consistent only...

This paper examines the determinants of illegal immigration in the United States from Mexico from 1976 to 1995. The main challenge in the empirical work is that the observations are not the number of individuals that attempt to enter the United States illegally, but rather the number of...