Economists have long debated whether the real exchange rate (RER) has a significant impact on export performance and output growth. Some claim that export performance depends only on nonprice competition and the RER is irrelevant to long-run growth, whereas others argue that the RER is a key...

Does trade improve institutions and contribute to long run growth? I develop a theory of trade, in which trade liberalization provides incentive to change institutions in two ways. On the one hand, trade leads to specialization according to comparative advantage, expanding the industries that do...

Because international trade theory has not provided an unambiguous prediction on the impact of trade on growth, a vast literature tried to identify the relationship empirically. After summarizing the influential large country case studies of the 1970s and early 1980s - which showed the folly of...

Existing evidence suggests that protectionist activity since the financial crisis has been muted, raising the question whether the historically well-documented relationship between growth, real exchange rates and trade protectionism has broken down. This paper re-visits this relationship for the...

Geopolitical conflicts have increasingly been a driver of trade policy. We study the potential effects of global and persistent geopolitical conflicts on trade, technological innovation, and economic growth. In conventional trade models the welfare costs of such conflicts are modest. We build a...

Brexit became an important subject not only for academics but also for international institutions, research centers and consultancy companies, think tanks and independent experts. The aim of this article is to: (1) provide a general approach of the literature; (2) see how the effects of Brexit...

Recent research has documented a U-shaped industrial concentration curve over an economy's development path. How far can neoclassical trade theory take us in explaining this pattern? We estimate the production side of the Heckscher-Ohlin model using industry data on 44 developed and developing...