This paper introduces a new trade model type. It combines the gravity model, well-known in international economics, with network theory. With this approach, complicated trade networks can be algebraically solved in form of systems of linear (differential) equations. Business cycles and...

This article introduces a new Melitz-type model of heterogeneous producers with decreasing returns to scale and different productivities. Different to previous models, it describes smallholder producers in rural areas of developing countries in the context of environment and development...