We revisit the Armington model developed by Feenstra et al. (2018) that allows the elasticity of substitution between the domestic and foreign varieties to be different from that between alternative foreign varieties. We develop a novel two-stage gravity-based framework to estimate these two...

We propose a multi-country endogenous growth model to understand the innovation relocation led by multinational production (MP). The model squares with the fact that countries with large net outward (inward) MP tend to specialize in product (process) innovation. The calibrated model shows that...

We propose a multi-country dynamic general equilibrium model to quantify the implications of trade and FDI liberalizations for the surge of global trade and current account (CA) imbalances. We calibrate our model to replicate the evolution of bilateral trade and FDI flows across 5 major...