Most trade-and-growth studies focus on the growth effects of autarky-to-free-trade changes, rather than those of incremental liberalizations. This paper characterizes how the strength and sign of openness-and-growth links depend upon the nature and level of trade barriers. For most types of...

Despite its important theoretical, empirical and policy implications, sunk-cost hysteresis has not been characterized for the case of model consistent, or rational expectations (previous studies assume that firms believe the forcing variable is generated by some ad hoc, time invariant process...

This paper shows that the market structure of an economy's research sector is an important determinant of the aggregate growth rate, even though it has hereto been ignored in the new growth literature. To make this point in a concrete context, a simple model is used to show that import...

Regional liberalization sweeps the globe like wildfire while multilateral nude talks proceed at a glacial pace. Why are countries eager to liberalize regionally but reluctant to do so multilaterally? The answer of the GATT-is-dead school is that multilateralism is too cumbersome for contemporary...

This paper presents a theoretical basis fcr the srgunent that large exchange rate shocks - such as the rise of the dollar from 1980 to 1985 - may shift historical relationships between exchange rates and trade flows. We begin with partial models in which large exchange rate fluctuations lead to...

Bilateral, product-level data exhibit a number of strong patterns that can be used to evaluate international trade theories, notably the spatial incidence of "export zeros" (correlated with distance and importer size), and of export unit values (positively related to distance). We show that...

This paper presents five theoretical openness-and-growth links that can account for trade-induced investment-led growth. The links are all demonstrated with neoclassical growth models developed in the context of trade models that allow for imperfect competition and scale economies. This sort of...

The new' economic geography focuses on the footloose-labor and the vertically-linked-industries models. Both are complex since they feature demand-linked and cost-linked agglomeration forces. I present a simpler model where agglomeration stems from demand-linked forces arising from endogenous...

This paper provides a minimalist derivation of the gravity equation and uses it to identify three common errors in the literature, what we call the gold, silver and bronze medal errors. The paper provides estimates of the size of the biases taking the currency union trade effect as an example....

Small Think Regionalism focused on the Vinerian question: "Would a nation gain from joining a trade bloc?" Big Think Regionalism considers regionalism's systemic impact on the world trading system, focusing mainly on two questions: "Does spreading regionalism harm world welfare?" and "Does...