We develop a new general equilibrium model of trade with heterogeneous firms, variable demand elasticities and endogenously determined wages. Trade integration favors wage convergence, intensifies competition, and forces the least efficient firms to leave the market, thereby affecting aggregate...

We investigate the dramatic 2008-2009 trade collapse using microdata from a small open economy, Belgium. Belgian trade essentially fell because of reduced quantities and unit prices, rather than fewer firms involved in international transactions, fewer trading partners per firm, or fewer...