A large body of empirical work documents that prices of traded goods change by a smaller proportion than real exchange rates between the trading countries (incomplete pass-through). I present a Ricardian model of trade and international price-setting with heterogeneous firms, Bertrand competition and incomplete information. The model implies that: 1) firm-level passthrough is incomplete and a U...

Technological change has led to a dramatic decline in the cost of communication and in the cost of coordinating activities performed in different locations. This has allowed firms in rich countries to fragment their production process and offshore an increasing share of the value chain to low-wage countries. 2 Richard Baldwin (2006) refers to this phenomenon as the “second unbundling.” In his w...

This paper examines the long-run determinants of immigration to Germany using a modified version of the Ricardo model. After a brief overview of labour flows to Germany and the related empirical literature, a Ricardian model of migration is estimated using static panel data methods. The results show that variables representing factor abundance appear to have no effect whatsoever on labour flows...

Frank D. Graham (1890–1949) presented an innovative multi-country, multi-commodity trade model that attached great importance to link commodities and quantity adjustments, not perfect specializations price adjustments as emphasized by John Stuart Mill Alfred Marshall. However, due some shortcomings, this was sufficiently understood has been forgotten. This study reconstructs Graham’s theory of ...

We develop a simulation model of world crop markets that is based upon Ricardian comparative advantage. We apply the model to twenty-three countries and provide measures of the degree of globalization in this sector, the gains from trade, and the elasticity of trade volumes to trade costs. The distribution of the gains from trade across countries is uneven due to important differences in openne...

This paper explores the possibility of international technology transfer in lieu trade a model with absolute and comparative advantage. Countries having advantage producing good may offer that to possible trading partner against fee both countries might gain. Thus, gains from be dominated by depending on extent advantages. We provide detailed conditions under which free equilibrium will pre-emp...