We use a global competition model of international trade to characterize the effects of trade reforms occurred in Chile at the end of the 70s. We calibrate the model and evaluate its results using a comprehensive plant-level dataset for the period 1979-96. The model is able to explain many of...

We analyze two main theories of international trade, the Heckscher-Ohlin theory and the Increasing Returns trade theory, by examining whether they can account for the empirical success of the so-called Gravity Equation. Since versions of both models can generate this prediction, we tackle the...

We incorporate culture into a standard trade model in two distinct ways. In the ¡°cultural affinity from work¡± model, workers receive a non- pecuniary cultural benefit from work in a particular industry. In the ¡°cultural externality¡± model, consumers of a product receive utility from...

This paper argues that seasonal fluctuations in international trade are large and have non-trivial effects on a country's resource allocation, production, and welfare. Using U.S. quarterly data, we find fluctuations of as much as 43% and 15% for apparel imports and exports respectively, and 7%...

This paper examines the hypothesis that turnover affects trade preferences. High turnover industries are similar to the Stolper- Samuelson assumption of perfect factor mobility, so factor of production drives trade preferences. Among low turnover industries, as in the specific factors model, net...

The article analyzes production and marketing lags in agri-food supply chains that force competitive producers and processors to commit to output targets before prices and exchange rates are realized. We show that export markets act as put options for exporters and an increase in the volatility...

Vector autoregressions are used to model price transmission through the coffee processing chain, from producers to the world market and from the world market to consumers. A comparison is made of price dynamics against a backdrop of two very different market structures: pre-1989, producers...

Following a critical review of the existing quantitative literature on cotton subsidies, a vector autoregression (VAR) is used to model the effects of US subsidies on the world cotton market from 1965 to 2001. Surprisingly, subsidies are found to have only a limited impact on prices despite...

Whether bilateral trade barrier data conform with the Grossman-Helpman (1995) model’s predictions about “trade talks” is examined in this article. A simple form of the prediction from the model is tested. Bilateral US-Japan and US-EU data from the 1990s are employed. The results are the...

In this paper, we present a technique to decompose changes in factor prices into the contribution of major determinants, namely movements in domestic and international prices, changes in capital and labour quantities, and technological progress. This is done in an open-economy framework. While...