Division of labor models have become a standard analytical tool, along withcompetitive general equilibrium models (Ricardian, HOS, Ricardo-Viner), in public finance, trade, growth, development, and macroeconomics. Yet unlike the earlier models, specialization models lack a canonical...

Localisation economies are known to boost the regional economy and its growth potential. The emergence of these effects is due to localised knowledge flows, the closeness to markets, and the diversity of services and industries. Localisation economies have the potential to increase the...

We construct a new database which covers production and trade in 136 primary commodities and 24 manufacturing and service sectors for 145 countries. Using this new more granular data, we estimate spillover effects from plausible trade fragmentation scenarios in a new multi-country, multi-sector,...

Worldwide trade flows are dominated by high-productivity firms, that have a large range of products. Since the product range of firms reflects partly trade flows, it is a source of economic differences in space. In this paper, I analyze the effects of the product mix of firms on agglomeration. I...

The division of labor between and within countries is driven by two fundamental forces, comparative advantage and increasing returns. We set up a simple Ricardian model with a Marshallian input sharing mechanism to study their interplay. The key insight that emerges is that the interaction...