The three essays in this dissertation address current issues in international trade and economic dynamics. In the first essay a model of international trade and quality differentiation is introduced that explains why rich countries produce and export goods of a higher quality than poor countries. The model is based on the insight from the business literature that interaction with consumers is an important part of successful quality management as it allows firms to receive feedback on the quality, deficiencies arid possible improvements of their products. The model predicts that interaction with consumers is less costly for firms located in rich countries, thus giving rich countries a comparative advantage in the production of high quality goods. The second essay develops a model in which consumers in different countries have different tastes. The resulting variations in demand result in variations in the production of certain varieties and thus in the trade pattern. The third essay studies the optimal use of an exhaustible resource in an economy where the output of the non-resource sector is fluctuating. In this model, the optimal extraction policy is characterized by relatively high resource extraction in present periods arid in periods where the output of the non-resource sector is relatively low. Resource extraction is relatively low in periods in the distant future and in periods where the output of the non-resource sector is relatively high. Consumption varies less and resource extraction varies more than the output of the non-resource sector.
