Trade, Domestic Frictions, and Scale Effects

Domestic Trade Frictions and Agriculture

I develop a model of heterogeneous land quality and study the relation between trade, farming productivity and welfare in Peru, where high domestic and international trade costs pose a major barrier to efficient farming. To quantify the model, I use a new dataset on spatially disaggregated crop prices, yields and land allocations. I then use the model to measure the welfare and productivity eff...

Online Appendix for “Domestic Trade Frictions and Agriculture”

In this section I characterize the optimal choices of farmers. I discuss the optimal choices of farmers for a plot ω, conditional on allocating a positive fraction of plot ω to the production of crop k, (φi,k (ω) > 0), an event I denote ω ∈ Ωi,k. Then I move on to prove the three main Propositions in the paper. Using Assumptions #1 and #2, I first show how to calculate the fraction of land allo...

Trade, Size, and Frictions: the Gravity Model

Supplement to “ Information Frictions in Trade ” (

This Supplemental Material comprises eight appendixes: Appendix A proves the existence and uniqueness of equilibrium prices; Appendix B presents a detailed description of the data used in the paper; Appendix C considers four alternative search frameworks; Appendix D considers three alternative complete information frameworks that may be consistent with the observe empirical patterns; Appendix E...

Trade Mechanism Selection in Markets with Frictions

We endogenize the trade mechanism in a search economy with many homogenous sellers and many heterogenous buyers of unobservable type. We study how heterogeneity and the traders’ continuation values—which are endogenous—inßuence the sellers’ choice of trade mechanism. Sellers trade off the probability of an immediate sale against the surplus expected from it, choosing whether to trade with every...