International trade is frequently thought of as a production technology in which the inputs are exports and the outputs are imports. Exports are transformed into imports at the rate of the price of exports relative to the price of imports: the reciprocal of the terms of trade. Cast this way, a...

Chile and Mexico exoperienced severe economic crises in the early 1980s. This paper analyzes four possible explanations for why Chile recovered much faster than did Mexico. Comparing data from the two countries allows us to rule out a monetarist explanation, an explanation on falls in real wages...

Chile and Mexico experienced severe economic crises in the early 1980s. This paper analyzes four possible explanations for why Chile recovered much faster than did Mexico. Comparing data from the two countries allows us to rule out a monetarist explanation, an explanation based on falls in real...

Detailed macroeconomic data to accompany the article in the Review of Economic Dynamics

Both Chile and Mexico experienced severe economic crises in the early 1980s, but Chile recovered much faster than did Mexico. Using growth accounting and a calibrated dynamic general equilibrium model, we conclude that the crucial determinant of this difference between the two countries was the...

This paper quantitatively tests the "new trade theory" based on product differen-tiation, increasing returns, and imperfect competition. We employ a standard model, which allows both changes in the distribution of income among industrialized coun-tries, emphasized by Helpman and Krugman (1985),...

Economic equilibria are usually solutions to fixed point problems rather than solutions ot convex optimization problems. This leads to two difficulties that are closely related: First, equilibria may be difficult to compute. Second, a model economy may have more than one equilibrium. This paper...