The aim of this work is analyzing the practical relevance, from a qualitative perspective, of a new methodology which is intended to include firm heterogeneity, as modeled by Melitz (2003), in computable general equilibrium effects. We assess to what extent the inclusion of industries with...

Comparing simulation results obtained by applied general equilibrium (AGE) models using intra-industry trade specifications based on the theoretical models presented by Armington (1969), Krugman (1980), and Melitz (2003) may be important in evaluating trade-related economic policies today. The...