This paper takes seriously the idea that international trade has played an important role in explaining both some convergence between developed economies as well as rising inequalities at the personal level. Previous studies used traditional trade theory as a reference framework. The empirical...

In this paper we introduce the concept of productive systems. Assuming a complementarity between skills and technology (more ''complex'' technologies are intrinsically more productive but they require a more skilled labour force) and gains from the division of labor, firms face a trade-off...

While transport costs have fallen, the empirical evidence also points at rising total trade costs. In a model of industry location with endogenous transaction costs, we show how and under which conditions a decline in transport costs can lead to an increase in the total cost of trade.

We study the impact of local taxation on the location and growth of firms. Our empirical methodology pairs establishments across jurisdictional boundaries to estimate the impact of taxation. Our approach improves on existing work as it corrects for unobserved establishment heterogeneity, for...

Spatial wage disparities can result from spatial differences in the skill composition of the workforce, in non-human endowments, and in local interactions. To distinguish between these explanations, we estimate a model of wage determination across local labour markets using a very large panel of...