Motivated by the Asian financial crises that began in 1997, this paper adds money to a Ricardian model of international trade in order to explore the role of financing costs in general-equilibrium trade. The purpose is to show not only that financing costs matter, but to argue a potentially...

This paper reexamines the evidence on the border effect, the finding that the border drives a wedge between domestic and foreign prices. We argue that the border effect can be inflated by the volatility and persistence of the nominal exchange rate and by the cross-country heterogeneity in the...

This paper examines the special role that trade liberalization in service industries can play in stimulating not only trade in services itself, but also in stimulating trade in goods. International trade in goods requires inputs from several services industries - what I call trade services, such...

This paper attempts to study the usage of the GATT/WTO dispute settlement mechanism and to explain its patterns across different regimes and decades, using a unified theoretical model. This study first explores the role of the degree of legal controversy over a panel ruling in determining...

This paper examines the effects of new goods on the relative wages of skilled-labor and trade patterns in a two-cone Heckscher-Ohlin model and shows that: (i) new goods can be a valid theoretical explanation for the rising skill premium in the U.S. (ii) new goods have both domestic and...

This paper explores the wide disparity of views on issues of international labor standards and the available options for addressing the issues involved. The discussion and analysis include: the definition and scope of labor standards; theoretical aspects of the economic effects of labor...

A well established empirical result is that countries that trade more with each other exhibit higher business cycle correlation. This paper examines the mechanisms underlying this relationship using a large cross-country industry-level panel dataset of manufacturing production and trade. We show...