We propose a stylized monopolistic competition model of international trade where firms differ with respect to the expected economic lifetime of their innovations. Upon entry, they receive a commonly observed signal which is updated over time. Jointly with partial irreversibility of investment,...

We propose a stylized monopolistic competition model of international trade where firms differ with respect to the expected economic lifetime of their innovations. Upon entry, they receive a commonly observed signal which is updated over time. Jointly with partial irreversibility of investment,...

The logic for multilateral cooperation in trade and beyond becomes stronger, not weaker. A new governance forum will emerge, where negotiating will take place in country clubs instead of among members at the WTO. However, by breaking protocol, the US president has gained substantial bargaining...