Why doesn't capital flow into fast-growing countries? In this paper, we provide a quantitative framework incorporating heterogeneous producers and underdeveloped domestic financial markets to study the joint dynamics of total factor productivity (TFP) and capital flows. When an unexpected...

This chapter (to appear in the forthcoming Handbook of International Economics, Vol. 5) develops a framework with which to interpret and survey answers to the question: how does increased openness affect aggregate welfare in a typical developing country? We decompose answers into four...

Measuring changes in welfare, and particularly the price index, is challenging in the absence of well-measured prices covering the entire consumption basket. We propose and implement a new approach to estimate changes in income-group specific price indices and welfare using rich, but widely...

We propose and implement a new approach that allows us to estimate income-specific changes in household welfare in contexts where well-measured prices are not available for important subsets of consumption. Using rich but widely available expenditure survey microdata, we show that we can recover...

After decades of supporting free trade, in 2018 the U.S. raised import tariffs and major trade partners retaliated. We analyze the short-run impact of this return to protectionism on the U.S. economy. Import and retaliatory tariffs caused large declines in imports and exports. Prices of imports...

Individuals that consume different baskets of goods are differentially affected by relative price changes caused by international trade. We develop a methodology to measure the unequal gains from trade across consumers within countries. The approach requires data on aggregate expenditures and...