This paper assesses the quantitative importance of including sectoral heterogeneity in computing the gains from trade. Our framework draws from Caliendo and Parro (2015) and Alvarez and Lucas (2007) and has sectoral heterogeneity along five dimensions, including the elasticity of trade to trade...

We measure gains from trade in multi-sector economies with non-homothetic preferences where changes in trade costs generate reallocation of expenditure across sectors. We show how to measure the trade elasticity and how it relates to welfare. In this environment, the trade elasticity now varies...

Multi-sector variants of standard gravity models typically predict much larger gains from trade than their one-sector counterparts. This paper explores to what extent this result is due to the relevant cross-sector variation observed in trade elasticity and to what extent it is instead an...