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...

The initial motivation for this paper was to consider whether international labor standards should be incorporated into the rules and mandate of the WTO.

The overall impression that emerges from the GATT review is that Japan has been struggling sonce 1991 in response to the collapse of its domestic asset markets, the onset of economic slowdown and recession, and a very sizable nominal and real appreciation of the yen.

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 story line a recent trade frictions between the U.S. and Japan in the auto market goes as follow. Initially, there was not much trade Japanese cars were made in Japan with mostly Japanese parts and the same was mostly true of North American cars.

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.