I use firm-level data to show that neither the Log-normal nor the Pareto distribution can approximate the shape of the productivity distribution along the entire support. While the former underpredicts the thickness of the right tail, the latter does not capture the shape of the left one. Using...

This paper shows that David Ricardo's gain from trade is miserably small compared with Adam Smith's gain from division of labor. It then proves that Ricardo's comparative advantage means forced exchange. Finally, it shows that Walras' free cooperation theory better explains international trade

Productive factors such as human and physical capital are accumulated and trade can affect the steady-state levels of such factors. Consequently, trade liberalization will have dynamic effects on output and welfare as the economy moves to its new steady state, in addition to its usual static...