Under plausible assumptions about preferences and technology, the model in this paper suggests that the entire volume of world trade matters for wage inequality. Therefore, trade integration, even among identical countries, is likely to increase the skill premium. Further, we argue that...

A by now large literature in regional economics has greatly improved our understanding of the determinants of the observed spatial disparities in productivity. However, this literature neglects what seems to be a robust and persistent fact accompanying regional productivity differences: high...

We show how, in general equilibrium models featuring increasing returns, imperfect competition and endogenous markups, changes in the scale of economic activity affect income distribution across factors. Whenever final goods are gross-substitutes (gross-complements), a scale expansion raises...