The informal sector is often seen as a coping mechanism for firms that choose to evade registration fees or pay low wages. In this paper, I investigate the role of the informal sector in the impact of trade liberalization on welfare, employment and wage inequality in a model of trade with...

We develop an asymmetric general oligopolistic equilibrium (AGOLE) model, which extends the range of possible applications in general oligopolistic equilibrium modelling. The AGOLE allows to incorporate endogenous and asymmetric marginal utilities of income across countries.As a first exemplary...

This paper shows that the novel gains from trade liberalization driven by intra-industry reallocations (Melitz (2003)) are not robust to changes in the preference structure. In the Melitz (2003) setting the unambigousness of the welfare effect depends crucially on the assumption of traditional...

There is strong evidence that different income groups consume different bundles of goods. This evidence suggests that trade liberalization can affect welfare inequality within a country via changes in the relative prices of goods consumed by different income groups (the price effect). In this...

We consider a dynamic three-stage game played by two regulator-firm hierarchies to capture the scale and technological effects of opening markets to international trade. Each firm produces one good sold on the market. Firms can invest in R&D in order to lower their fixed emission/output ratio...

Using a three factor knowledge-capital model of trade and multinational activity, we consider a set of policy experiments to assess the welfare effects of trade and investment liberalization in general equilibrium. Specifically, we address the question of whether and under which circumstances a...

Recent rounds of GATT and later WTO have advocated widespread tariffication, meaning that existing non-tariff barriers be converted into import equivalent tariffs. From an economic point of view, the effects of such tariffication are not entirely clear. The paper presents a general equilibrium...

In this paper, we model trade liberalisation as an endogenous process and shed new light on how economic fundamentals like endowments and technology affect potential gains, the welfare effects of liberalisation and its consequences for intra-industry trade. We construct a general equilibrium...

Firm-based approaches to international trade have revolutionized the study of trade politics. While the political economy of trade has conventionally emphasized the role of export propensity at the industry level in determining interests over policy outcomes, engaging in trade is an inherently...