New Trade Models, Same Old Gains?
Micro-level data have had a profound influence on research in international trade over the last ten years. In many regards, this research agenda has been very successful. New stylized facts have been uncovered and new trade models have been developed to explain these facts. In this paper we investigate to which extent answers to new micro-level questions have affected answers to an old and central question in the field: How large are the gains from trade? A crude summary of our results is: "So far, not much."
We thank Marios Angeletos, Pol Antras, Andy Atkeson, Ariel Burstein, Dave Donaldson, Maya Eden, Gita Gopinath, Gene Grossman, Ivana Komunjer, Pete Klenow, Giovanni Maggi, Ellen McGrattan, Jim Tybout, Jonathan Vogel, Ivan Werning as well as participants at Arizona State, the Minneapolis Fed, MIT, NBER ITI Winter meeting, Penn State, the Philadelphia Fed, Vanderbilt University, and University of Virginia for helpful suggestions. Andrés Rodríguez-Clare thanks the Human Capital Foundation (http://www.hcfoundation.ru) for support. All errors are our own. The views expressed herein are those of the author(s) and do not necessarily reflect the views of the National Bureau of Economic Research.
Costas Arkolakis & Arnaud Costinot & Andres Rodriguez-Clare, 2012. "New Trade Models, Same Old Gains?," American Economic Review, American Economic Association, vol. 102(1), pages 94-130, February. citation courtesy of