Several models on growth and trade conclude that a country grows more when trading with a less developed country. This paper shows that this conclusion depends crucially on the assumptions of homothetic preferences and/or having just two goods with respect to learning-by-doing. The paper...

Models on the composition of trade and growth often assume that the technological content of trade is negatively correlated with the income of the trading partner. First, this paper shows that this assumption is not supported empirically. Second, it presents a Ricardian model with non-homothetic...

A growing body of work has shown that aggregate shocks affect the formation of preferences and beliefs. This article reviews evidence from sociology, social psychology, and economics to assess the relevance of aggregate shocks, whether the period in which they are experienced matters, and...

A growing body of work has shown that aggregate shocks affect the formation of preferences and beliefs. This article reviews evidence from sociology, social psychology, and economics to assess the relevance of aggregate shocks, whether the period in which they are experienced matters, and...

Are preferences for reforms driven by individuals’ own endowments or beliefs? To address this question, we conducted a cross-country survey on people’s opinions on employment protection legislation—an area where reform has proven to be difficult and personal interests are at stake. We find...