type="main" <p>This paper examines how trade liberalization affects national and global pollution in a multi-country model incorporating monopolistic competition and intra-industry trade as well as inter-industry trade. Each country produces skill-intensive differentiated goods and labor-intensive...</p>

This paper develops a model of North-South trade with a continuum of goods, external economies of scale and international capital mobility. The North-South wage gap must exceed any difference in labor quality for South to overcome the established external economies in North. In equilibrium North...