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This paper constructs a two-country model to investigate how tariff policy influences productivity growth through adjustments in industry location patterns. The locations of production and innovation are determined based on trade barriers and imperfect knowledge dissemination. Tariff policy has...
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sensitive to different empirical specifications and sometimes exhibit theory-inconsistent coefficients. Measurement issues are …
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border. We show that the gravity model usually estimated does not correspond to the theory behind it. We solve the 'border … puzzle' by applying the theory seriously. We find that national borders reduce trade between the US and Canada by about 44 …
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