We develop a model where trade liberalization leads to skill-biased technological change, which in turn raises the relative return to skilled labour. As firms get access to a larger market, they have incentives to choose a more skill-intensive technology because a lowering of variable costs...

The paper examines why ‘globaphobia’ seems to be more prevalent among labour in the United States than in Europe. It argues that globalization has generated more wealth, but also more income inequality and adjustment problems, in America than in Europe. In the United States, the median voter...

For Africa, a regional customs union is unlikely to realise net welfare gains (in the sense of trade creation dominating trade diversion) which cannot be attained through unilateral trade liberalization. Unilateral reform has often failed in Africa, however. A regional customs union tied to...

This paper traces the links from trade shocks to poverty in developing countries. It considers the determinants of household and individual welfare (including potential differences between household members) and then identifies six trade-to-poverty links: the extent to which prices change and...

This paper has two purposes. It introduces a direct approach to policy analysis in endogenous growth models - the q-theory approach - and uses this to illustrate several new openness-and-growth links that appear when we enrich the economic content of the early trade and growth models. The...

This Paper analyses the effects of reducing trade costs on the location of manufacturing firms that are vertically linked and differ in factor intensities. I extend the new economic geography literature, by embedding a model with vertical linkages within a Heckscher-Ohlin framework. Firms can...

What is the impact of movement towards free trade on output? Can this impact permanently affect output levels, and more importantly, will it have an impact on steady-state growth rates? This paper provides empirical evidence showing how countries have exhibited substantial increases in their...

After a brief period of liberal agricultural policies, Central and East European (CEE) countries have begun to rely increasingly on price subsidies and trade restrictions. We outline the situation of CEE agriculture and describe current policies. Scarce government funds could be better used to...

We examine the qualitative and quantitative predictions of a heterogeneous firm model à la Melitz (2003) in the context of the Canada - US Free Trade Agreement (CUSFTA) of 1989. We calibrate our model to the pre-trade liberalization stage, simulate the trade liberalization, and compute the...

In the first half of the 1990s many Central and East European countries (CEECs) experienced very high growth rates of exports to OECD nations. This paper investigates the contribution of sources of comparative advantage and economic restructuring on the pattern, composition and volume of trade....