This paper reviews the branch of literature that applies models developed in international trade theory (Microeconomics) to explain phenomena found in international finance (Macroeconomics). Among all international trade models, the New New Trade Theory with productivity heterogeneity across...

We present, extend and estimate a model of international trade with firm heterogeneity in the tradition of Melitz (2003) and Melitz and Ottaviano (2005). The model is constructed to yield testable implications for the dynamics of international prices, productivity levels and markups as functions...

A parsimonious structural model of price and quantity dynamics is applied to Swedish exports and export prices for manufactured goods 1972-1996. Two sources of dynamics are considered: customer markets and pre-set prices. The dynamic adjustment of exports is very much in line with what the...

Empirical studies show that tradable consumption goods are more expensive in rich countries. This paper proposes a simple yet novel explanation for this apparent failure of the law of one price: Consumers' utility from tradable goods depends on their consumption of complementary goods and...

This paper studies export dynamics in emerging markets following large devaluations. We document two main features of exports that are puzzling for standard trade models. First, given the change in relative prices, exports tend to grow gradually following a devaluation. Second, high interest...

This paper is the first attempt to structurally estimate the impact of globalization on markups, and the effect of changing markups on welfare, in a monopolistic competition model. To achieve this, we work with a class of preferences that allow for endogenous markups and firm entry and exit that...

Import competition from China is pervasive in the sense that for many good categories, the competitive environment that US firms face in these markets is strongly driven by the prices of Chinese imports, and so is their pricing decision. This paper quantifies the effect of the...

We study the effects of tariffs and iceberg trade costs in a two-sector dynamic variation of the Melitz (2003) model extended to include a sunk cost of exporting, establishment-level uncertainty in productivity, capital accumulation, and material usage. We calibrate the model to match both...

We study empirically and theoretically the growth of U.S. manufacturing exports from 1987 to 2007. We use plant-level data on exporters' export intensity to identify the changes in iceberg costs over this period. Given this change in iceberg costs, we find that a GE model with heterogeneous...