In this paper, we establish the importance of experience in international trade in reducing unmeasured trade costs and facilitating bilateral trade. We find a strong role for experience, measured in years of positive trade, for both aggregate and sectoral bilateral trade. In an augmented gravity...

Capturing the notion of kaleidoscopic comparative advantage ( <link rid="b7">Bhagwati, 1998</link>), we show that international trade increases the volatility of profitability. In this framework, we address the labor market implications of an increase in openness, when insurance and credit markets are imperfect. With...

This paper analyzes the effects of trade liberalization on the level and volatility of factor returns, in a model with identical technologies across industries and industry-specific uncertainty. The results show an increase in the return to capital and, under certain conditions, a decline in the...