Economists emphasize the welfare gains of unrestricted trade, but politicians worry about the income distribution effects of increased competition. We show that the welfare gains of a trade shock become ambiguous if inaccurate information hinders optimal income redistribution with distortionary...

We show that the specification of technology differences in recent empirical studies of trade is not supported by basic growth theory and may lead to biased estimates of the pattern of specialization and trade.

We show that the specification of technology differences in recent empirical studies of trade is not supported by basic growth theory and may lead to biased estimates of the pattern of specialization and trade.