This paper studies the impact of trade liberalization on labor market outcomes. First, we find that bilateral trade liberalization does not affect exports towards third countries. To accommodate this novel result, we deviate from existing literature and rely on a three-country monopolistic...

In this paper we develop a three-country monopolistic competition model with variable elasticity of substitution and vertical linkages to study the impact of trade liberalization on trade creation, trade diversion and labor market outcomes. This framework allows us to identify a source of gain...

The dynamic spatial general equilibrium model RHOMOLO with endogenous firm location incorporates multiple sources of agglomeration and dispersion. Agglomeration is driven mainly by increasing returns to scale and localised externalities; dispersion by costly trade and imperfect competition. In...

Many trade models of monopolistic competition identify cost efficiency as the main determinant of firm performance in export markets. To date, the analysis of demand factors has received much less attention. We propose a new model where consumer preferences are asymmetric across varieties and...

The pattern of trade observed from firm-product-country data calls for a new generation of models. To address the unexplained variation in the data, we propose a new model of monopolistic competition where varieties enter preferences non-symmetrically, capturing both horizontal and vertical...

This paper compares European and Chinese exports in the clothing sector since the end of the Multi-Fiber Arrangement in 2005. Using detailed product-level data from UN Comtrade, we document the pattern of export prices and quantities observed for both countries, considering both exports to the...

This paper contributes to the ongoing debate on macroeconomic imbalances and external competitiveness by developing a set of indicators of export capability at a country-product level which can be used to complement the existing toolkit of instruments based mostly on unit labour costs and...

The recent availability of trade data at a firm-product-country level calls for a new generation of models able to exploit the large variability detected across observations. By developing a model of monopolistic competition in which varieties enter preferences non-symmetrically, we show how...

The pattern of trade observed from firm-product-country data calls for a new generation of models. To address the unexplained variation in the data, we propose a new model of monopolistic competition where varieties enter preferences non-symmetrically, capturing both horizontal and vertical...

We apply a simple method to study the relative quality of Chinese versus European products exported in the clothing sector after the end of the Multi-Fiber Arrangement. Based on the model of Foster et al (2008), we interpret the relative change of export prices and quantities sold in narrowly...