This paper empirically examines the extent to which a country’s economic growth is influenced by the economies of its trading partners. Panel estimation results based on four decades of data for more than 100 countries show that trading partners’ growth has a strong effect on domestic growth, even after controlling for the influence of common global and regional trends. The results are robust t...

This paper discusses the political economy behind the principal trade policy decisions in Russia since independence. I discuss why export restraints were widely employed in the early transition years and why the export quotas proved more difficult to remove than anticipated. Why it was so difficult to resolve the monetary basis for the collapse in trade among the newly independent states. Why t...

A by now large literature in regional economics has greatly improved our understanding of the determinants of the observed spatial disparities in productivity. However, this literature neglects what seems to be a robust and persistent fact accompanying regional productivity differences: high productivity regions also have lower unemployment than low productivity regions. In this paper, we set o...

Building on the experience of NAFTA, and assuming that rules of origin (RoO) negotiated under NAFTA are likely to resemble those that would be agreed upon in an FTAA, this paper discusses how different RoO criteria would affect different Southern partners in a multi-stage production setting. Next, we use a combination of parametric and non-parametric methods to estimate the costs of RoO under N...

There has been great focus in the recent trade theory literature on the introduction of firm heterogeneity into trade models. This introduction has highlighted the importance of the entry/exit decision of firms in response to changes in trade barriers. However, it is typical in many of these models to use iceberg transport costs as a general form of trade barriers that can be interchangeable wi...

This paper examines a simple model of outsourcing involving matching frictions and home bias in firms’ acquisition of intermediate goods. Two groups of seller firms—local sellers and foreign sellers—may face different degrees of search frictions even though they are identical in terms of productivity. Two groups of buyer firms are considered: one group accepts local and foreign sellers equally,...

We investigate a mechanism whereby a group of nations forming a free trade area simultaneously can efficiently satisfy industrialization targets. The mechanism does not rely on cross-country transfers, and it is efficient for each member country individually even if other members of the free trade area do not implement the efficient policy. It allows each member country to gain from participati...

This study tests the importance of Ricardian technology di¤erences for international trade. Panel regressions …nd technology growth increases manufacturing exports. To establish a causal relationship between technology and trade, instrumental-variables speci…cations exploit uneven technology di¤usion from the US through ethnic scienti…c networks. The instrumented elasticity of export growth to ...

We analyze the e!ects of trade liberalization on "rms' decisions and pro"ts in a vertical product di!erentiation model with countries which have di!erent characteristics. Firms decide product speci"cations at the beginning of the game, in which autarky is followed by trade liberalization (whose date is anticipated). Our analysis suggests that a "rm located in a large (or rich) country is the li...