We develop a model of international trade with two dimensions of firm heterogeneity and export quality constraints that manifest as higher variable trade costs for lower quality firms. In addition to "productivity", firms are also heterogeneous in their "caliber" -- the ability to develop...

Empirical studies show that tradable consumption goods are more expensive in rich countries. This paper proposes a simple yet novel explanation for this apparent failure of the law of one price: Consumers' utility from tradable goods depends on their consumption of complementary goods and...

This paper shows that tariffs and production subsidies can Pareto-improve welfare in a small open economy when a government is concerned with income redistribution under asymmetric information. In international trade theory, free trade is optimal if the government can use lump-sum taxes and...

This paper investigates two explanations for why industries might become more productive over time. The first explanation, termed the real productivity case,' is one in which firms become more productive and this leads to more productive industries. The second explanation, termed the...

This paper explores a number of conceptual issues that are germane to the analysis of conflict and cooperation in international economic policy and law. The focus is on issues involving conflict and cooperation that have been treated in the theory of international trade, in particular departures...

In this paper, we adapt the latest version of the Michigan Model of World Production and Trade to incorporate relationships and data for cross-border services trade and foreign direct investment (FDI) in the major developed and developing countries subsumed in the model's structure and database.

The paper provides a brief overview of the new World Trade Organization, successor to the GATT as the arbiter of cooperation in matters of international trade policy.

We use a special constructed version of the Michigan Brown-Deardorff-Stern (BDS) Computational General Equilibrium (CGE) Model of World production and Trade to estimate the potential economic effects on the Tunisian economy that may result from the free trade agreement (FTA) between Tunisia and...

In May, 1981, a voluntary export restraint (VER) was placed on exports of automobiles from Japan to the United States. As trade policies go, this one was important. The automobile industry is the largest manufacturing industry in the United States and the initiation of the VER captured head-...

This paper reviews the main issues in the forthcoming WTO negotiations, including: a review of the accomplishments of the Uruguay Round and the multilateral negotiations that have since followed; identification and analysis of Uruguay Round built-in agenda issues and new issues that may possibly...