Econ 2530a: International Trade Elhanan Helpman September 12, 2011

Recommended Readings (Readings are listed in date order.)

Background Reading Ricardo, D., The Principles of Political Economy and Taxation, 1817 (Chapter 7). Ohlin, B., Interregional and International Trade, (Cambridge, MA, Harvard University Press), 1933 (Chapters 1-7). Viner, J., Studies in the Theory of International Trade, 1937, (Chapters 8-9) Jones, R.W. and P.B. Kenen (eds.), Handbook of International Economics, Vol. I-II, (Amsterdam, North Holland), 1984. Kierzkowski, H. (ed.), Monopolistic Competition and International Trade (Oxford: Oxford University Press), 1984. Feenstra, R. (ed.), Empirical Methods for International Trade, (Cambridge, MA, and London,The MIT Press), 1988. Flam, H. and M.J. Flanders (editors and translators), Heckscher-Ohlin Trade Theory, (Cambridge, MA, and London, The MIT Press), 1991 (Chapter 1). Grossman, G.M. (ed.), Imperfect Competition and International Trade, (Cambridge, Ma, and London, The MIT Press), 1992. Grossman, G.M. and K. Rogo¤ (eds.), Handbook of International Economics, Vol. III, (Amsterdam, North Holland), 1995.

1. Trade and Welfare Samuelson , P.A., “The Gains from International Trade”, Canadian Journal of Economics and Political Science, 1939. Baldwin, R.E., “The New Welfare Economics and Gains from International Trade”, Quarterly Journal of Economics, 1952. Samuelson, P.A., “The Gains from International Trade Once Again”, Economic Journal, 1962. Ohyama, M., “Trade and Welfare in General Equilibrium”, Keio Economics Studies, 1972. Smith, M.A.M., “Intertemporal Gains from Trade ”, Journal of International Economics, 1979. Grossman, G.M., “The Gains from Intentional Factor Movements”, Journal of International Economics, 1984. 2. General Characteristics of Trade Patterns Deardor¤, A., “The General Validity of the Law of Comparative Advantage,”Journal of Political Economy, 1980, 88(5), 941-57. Choi, Y-S. and P. Krishna, “The Factor Content of Bilateral Trade: An Empirical Test,” Journal of Political Economy 112(4), 2004, 887-914. 3. Ricardian Trade Theory Edgeworth, F., “The Theory of International Values”, Parts I, II, and III in his Papers Relating to Political Economy, Vol. II. McKenzie, L., “Specialization and E¢ ciency in World Production”, Review of Economic Studies,1953-54. Jones, R.W., “Comparative Advantage and the Theory of Tari¤s: A Multi-country Multi-commodity Model”, Review of Economic Studies, 1961. Wilson, C., “On the General Structure of Ricardian Models with a Continuum of Goods”, Econometrica, 1980. Davis, D.R., “Intra-Industry Trade: A Heckscher-Ohlin-Ricardo Approach”, Journal of International Economics, 39(1995) 201-26.

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Costinot, A., “An Elementary Theory of Comparative Advantage,”Econometrica, 77, 2009, 1165-1192. 4. Testing the Ricardian Theory McDougall, G.D.A., “British and American Exports: A Study Suggested by the Theory of Comparative Costs”, Part I, Economic Journal, 1951 (Dec.), Vol. LXI, No. 244, 697-724. McDougall,G.D.A., “British and American Exports: A Study Suggested by the Theory of Comparative Costs”, Part II, Economic Journal, 1952 (Sept.), Vol. LXII, No. 247, 487-521. Stern, R.M., “British and American Productivity and Comparative Costs in International Trade”, Oxford Economic Papers, October 1962, 14(3), 275-96. Chor, Davin, “Unpacking Sources of Comparative Advantage: A Quantitative Approach,” Journal of International Economics, November 2010, 82(2): 152-167 Costinot, Arnaud, Dave Donaldson and Ivana Komunjer, “What Goods Do Countries Trade? Quantitative Exploration of Ricardo’s Ideas,” NBER Working Paper No. 16262, 2010, Review of Economic Studies, forthcoming. Fieler, Ana Cecilia, “Non-Homotheticity and Bilateral Trade: Evidence and a Quantitative Explanation,” Econometrica, 2011, 79(4), 1069-1101. 5. Heckscher-Ohlin Trade Theory Heckscher, E., “The E¤ect of Foreign Trade on the Distribution of Income”, Economisk Tidskrift, 1919 (in Flam and Flanders). Ohlin, B., “The Theory of Trade”, in Flam and Flanders, 1991. Jones, R.W., “Factor Proportions and the Heckscher-Ohlin Theorem”, Review of Economic Studies, 1956-57 (reprinted in his Essays, 79). Vanek, J., “Factor Proportions Theory: The N-factor Case”, Kyklos, 1968. Deardor¤, A., “Weak Links in the Chain of Comparative Advantage”, Journal of International Economics, 1979. Dornbusch, R., S. Fischer and P.A. Samuelson, “Heckscher-Ohlin Theory with a Continuum of Goods”, Quarterly Journal of Economics Papers, 1980.

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Ford, J.L., “The Ricardian and Heckscher-Ohlin Explanations of Trade: A General Proof of an Equivalence Theorem and its Implications”, Oxford Economic Papers,1982. Deardor¤, A., “The General Validity of the Heckscher-Ohlin Theorem”, American Economic Review, 72(4), September, 1982, 683-94. Helpman, E., “The Factor Content of Foreign Trade”, Economic Journal, 1984. Factor Price Equalization Samuelson, P.A., “International Trade and the Equalization of Factor Prices”, Economic Journal, 1948. Samuelson, P.A., “International Factor-Price Equalization Once Again”, Economic Journal, 1949. Lerner, A., “Factor Prices and International Trade”, Economica, 1952. Samuelson, P.A., “Prices of Factors and Goods in General Equilibrium”, Review of Economic Studies, 1953-4. McKenzie, L., “Equality of Factor Prices in World Trade”, Econometrica, 1955. Prices and Quantities Stolper, W. and P.A. Samuelson, “Protection and Real Wages”, Review of Economic Studies, 1941. Rybczynski, J.M., “Factor Endowments and Relative Commodity Prices”, Economica, 1955. Jones, R.W., “The Structure of Simple General Equilibrium Models”, Journal of Political Economy, December 1965, LXXIII(6), 557-72.(Reprinted in his Essays). Jones, R.W., and J.A. Scheinkman, “The Relevance of the Two-Sector Production Model in Trade Theory”, Journal of Political Economy, 1977. Factor Speci…city Jones, J.W., “A Three Factor Model in Theory, Trade and History”, in Bhagwati, J., R.W. Jones, R. Mundell and J. Vanek (eds.), Trade, Balance of Payments and Growth, 1971 (reprinted in his Essays).

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Samuelson, P.A., “Ohlin was Right”, Swedish Journal of Economics, 1971. Short-Run Speci…city and Long-Run Adjustment Mayer, W., “Short-Run and Long-Run Equilibrium for a Small Open Economy”, Journal of Political Economy, Sept./Oct. 1974, 82(5), 955-67. Mussa, M., “Dynamic Adjustment in the Heckscher-Ohlin- Samuelson Model”, Journal of Political Economy, 1978, 86(5), 775-91. Neary, J.P., “Short-Run Capital Speci…city and the Pure Theory of International Trade”, Economic Journal, 88(Sept.), 1978, 488-510. 6. Testing the Heckscher-Ohlin Theory Leontief, W.W., “Domestic Production and Foreign Trade: The American Capital Position Re-examined”, Economica Internazionale, 1954. Leontief, W.W., “Factor Propositions and the Structure of American Trade: Further Theoretical and Empirical Results”, Review of Economics and Statistics, 1956. Kenen, P.B.,“Nature, Capital and Trade”, Journal of Political Economy, 1965. Keesing, D., “Labor Skills and Comparative Advantage”, American Economic Review, 1966 (Papers and Proceedings). Baldwin, R.E., “Determinants of the Commodity Structure in U.S. Trade”, American Economic Review, 1971. Magee, S.P., “Three Simple Tests of the Stolper-Samuelson Theory”, in Oppenheimer, P. (ed.,) Issues in International Economics, 1980. Leamer, E.E., “The Leontief Paradox , Reconsidered,” Journal of Political Economy, 1980, 88(3), 495-503. Brecher, R.A. and E.V. Choudri, “The Leontief Paradox Continued”, Journal of Political Economy, 1982. Deardor¤, A.V., “Testing Trade Theories and Predicting Trade Flows”, in Jones and Kenen, 1984 Maskus, K.E., “A Test of the Heckscher-Ohlin-Vanek Theorem: The Leontief Commonplace”, Journal of International Economics, 1985.

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Bowen, Harry P., Leamer, Edward E. and Sveikauskas, Leo, “Multicountry, Multifactor Tests of the Factor Abundance Theory,”American Economic Review, 1987, 77(5), 791-809. Hunter, L., “The Contribution of Non-Homothetic Preferences to Trade”, Journal of International Economics, 1991. Tre‡er, D., “International Factor Price Di¤erences: Leontief was Right!,” Journal of Political Economy, December, 1993, 101(6), 961-87. Tre‡er, D., “The Case of the Missing Trade and Other Mysteries,”American Economic Review, December 1995, 85(5), 1029-46. Harrigan, J., “Factor Endowments and the International Location of Production: Econometric Evidence from the OECD, 1970-1985,”Journal of International Economics, 1995. Leamer, E.E. and J. Levinsohn, “International Trade Theory: The Evidence”, in Grossman and Rogo¤, 1995. Harrigan, J., “Technology, Factor Supplies, and International Specialization: Estimating the Neoclassical Model,” American Economic Review, 1997. Davis, D.R., D.E. Weinstein, S.C. Bradford and K. Shimpo, “Using International and Japanese Regional Data to Determine When the Factor Abundance Theory of Trade Works,” American Economic Review, June 1997, 87(3), 421-46. Helpman, E. “The Structure of Foreign Trade,” Journal of Economic Perspectives, Spring 1999, 13(2), 121-44. Davis, D.R. and D.W. Weinstein, “An Account of Global Factor Trade,” American Economic Review, December 2001, 91(5), 1423-53. Schott, Peter K., “One Size Fits All? Heckscher-Ohlin Specialization in Global Production,” American Economic Review, 2003, Vol. 93, 686-708. 7. Trade Under Uncertainty Mayer, W., “The Rybczynski, Stolper-Samuelson and Factor-Price Equalization Theorems under Uncertainty”, American Economic Review, December 1976, 66(5), 797-808. Helpman, E., and A. Razin, “Uncertainty and International Trade in the Presence of Stock Markets”, Review of Economic Studies, June 1978, 45(2), 239-50. 6

Helpman, E. and A. Razin, A Theory of International Trade under Uncertainty, (New York and London, Academic Press), 1978 (Chapters 2, 4-7 and 11.) Grossman, G.M. and A. Razin, “The Pattern of Trade in a Ricardian Model with Country-Speci…c Uncertainty”, International Economic Review, February 1985, 26(1), 193-202. Helpman, E., “Trade Patterns under Uncertainty with Country Speci…c Shocks”, Econometrica, May 1988, 56(3), 645-59. 8. Factor Movements Svensson, L., “Factor Trade and Goods Trade”, Journal of International Economics, 16(1984), 365-78. 9. Trade and Growth I Bhagwati, J.N., “Immiserizing Growth: A Geometric Note”, Review of Economic Studies, 1956. Findlay, R. and Grubert, H., “Factor Intensities, Technological Progress and the Terms of Trade”, Oxford Economic Papers, 1959. Findlay, R., “Factor Proportions and Comparative Advantage in the Long Run”, Journal of Political Economy, 1970. Findlay, R., “Growth and Development in Trade Models”, in Jones and Kenen, 1984. Smith, A., “Capital Theory and Trade Theory”, in Jones and Kenen, 1984. 10. Increasing Returns and Competition Melvin, J.R., “Increasing Returns to Scale as a Determinant of Trade”, Canadian Journal of Economics, 1969. Ethier, W.J., “Internationally Decreasing Costs and World Trade”, Journal of International Economics, 1979. Ethier, W.J., “Decreasing Costs in International Trade and Frank Graham’s Argument for Protection”, Econometrica, 1982. Helpman, E., “Increasing Returns, Imperfect Markets, and Trade Theory”, in Jones and Kenen (pp. 337-48), 1984. Grossman, G.M. and E. Rossi-Hansberg, “External Economies and International Trade Redux,” July 2009, 7

http://www.princeton.edu/~grossman/ExternalEconomies.pdf Princeton University 11. Oligopoly Burestam Linder, S., An Essay on Trade and Transformation, 1961. Caves, R.E., International Trade, International Investment and Imperfect Markets, Special Papers in International Economics No. 10, International Finance Section, Princeton University, 1976. Brander, J.A., “Intra-Industry Trade in Identical Commodities”, Journal of International Economics, 1981. Brander, J.A., and Krugman, P.R., “A Reciprocal Dumping Model of International Trade,” Journal of International Economics, November 1983, 15(3/4), 313-21. Helpman and Krugman, 1985, Chapter 5. Venables, A.J., “International Capacity Choice and National Market Games”, Journal of International Economics, 1990. Ben-Zvi, S. and E. Helpman, “Oligopoly in Segmented Markets,” in Grossman, 1992. Neary, J. P., “International Trade in General Oligopolistic Equilibrium,”mimeo, 2009 http :/ / w w w .c e sifo -g ro u p .d e / p o rta l/ p a g e / p o rta l/ C F P _ C O N F / C F P _ C O N F _ 2 0 0 9 / C o n f-g e 0 9 -W h a lle y / C o n f-g e 0 9 -p a p e rs/ g e 0 9 _ n e a ry.p d f

12. Monopolistic Competition Lancaster, K., “Intra-Industry Trade under Perfect Monopolistic Competition”, Journal of International Economics, 1980. Krugman, P.R., “Scale Economies, Product Di¤erentiation and the Pattern of Trade”, American Economic Review, 1980. Dixit, A. and V. Norman, Theory of International Trade, (Cambridge University Press), 1980, Chapter 9. Krugman, P.R., “Intra-Industry Specialization and the Gains from Trade”, Journal of Political Economy, 1981. Helpman, E., “International Trade in the Presence of Produce Di¤erentiatio´n, Economies of Scale and Monopolistic Competition: A Chamberlain-Heckscher- Ohlin Approach”, Journal of International Economics, 1981.

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Ethier, W.J., “National and International Returns to Scale in the Modern Theory of International Trade”, American Economic Review, 1982. Helpman, E., Monopolistic Competition in Trade Theory (Princeton University, International Finance Section Special Paper No. 16), 1990. Krugman, P.R., “Increasing Returns, Imperfect Competition and the Positive Theory of International Trade,” in Grossman and Rogo¤, 1995. Krugman, P.R. and A. Venables, “Globalization and the Inequality of Nations,”Quarterly Journal of Economics, November 1995, CX(4), 857-80. Puga, D. and A.J. Venables, “The Spread of Industry: Spatial Agglomeration in Economic Development,” Journal of the Japanese and International Economies, December 1996, 10(4), 440-64. Romalis, J., “Factor Proportions and the Structure of Commodity Trade,” American Economic Review 94, March 2004, 67-97. 13. Multinational Corporations Hymer, S., “The E¢ ciency (Contradictions) of Multinational Corporations”, American Economic Review, 1970. Caves, R.E., “International Corporations: The Industrial Economics of Foreign Investment”, Economica. 1971. Dunning, J.H., “Trade, Location of Economic Activity and the Multinational Enterprise: In Search for an Electric Approach”, in B. Ohlin, P.O. Hesselborn and P.M. Wijkman (eds.) The International Allocation of Economic Activity, Macmillan, 1977. Helpman and Krugman, 1985, Chapter 13. Helpman, E., “A Simple Theory of International Trade with Multinational Corporations”, Journal of Political Economy, 1984. Markusen, J.R., “Multinational, Multiplant Economies, and the Gains from Trade”, Journal of International Economics, 1984. Helpman, E., “Multinational Corporations and Trade Structure”, Review of Economic Studies, 1985. Ethier, W., “The Multinational Firm”, Quarterly Journal of Economics, 1986.

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Brainard, S.L., “A Simple Theory of Multinational Corporations and Trade with a Trade-O¤ Between Proximity and Concentration,” NBER Working Paper No. 4269, 1993. Markusen, J. R., “The Boundaries of Multinational Enterprises and the Theory of International Trade,” Journal of Economic Perspectives, Spring 1995, 9(2), 16989. Caves, R.E., Multinational Enterprise and Economic Analysis, Cambridge University Press, Second Edition, 1996. Ethier, J.W. and J.R. Markusen, “Multinational Firms, Technology Di¤usion and Trade,” Journal of International Economics, 1996. Markusen, J.R. and A.J. Venables, “Multinational Firms and the New Trade Theory,” Journal of International Economics (1998), 46(2), 183-203. Yeaple, S.R., “The Role of Skill Endowment in the Structure of U.S. Outward Foreign Direct Investment,” Review of Economics and Statistics, August 2003, 85 (3), 726-734. Yeaple, S.R., “The Complex Integration Strategies of Multinationals and Cross Country Dependencies in the Structure of Foreign Direct Investment,” Journal of International Economics, August 2003, 60 (2), 293-314. 14. International Organization of Production Grossman, G.M. and E. Helpman, “Managerial incentives and the international organization of production,” Journal of International Economics, July 2004, 63 (2), 237-262. Girma, S., R. Kneller and M. Pisu, “Exports versus FDI: An Empirical Test,”Review of World Economics, 2005, 141 (2), 193-218. Head, K. and J. Ries, “Heterogeneity and the FDI versus Export Decision of Japanese Manufacturers,” Journal of the Japanese and International Economy, December 2003, 17 (4), 448-467. Tre‡er, Daniel (2004), “The Long and Short of the Canada-U.S. Free Trade Agreement,” American Economic Review, Vol. 94, pp. 870-895. Grossman, G. M. and E. Helpman, “Outsourcing in a Global Economy,” Review of Economic Studies 72(1), 2005, 135-159.

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Grossman, G.M., E. Helpman and A. Szeidl, “Optimal Integration Strategies for the Multinational Firm,” Journal of International Economics 70, 2006, 216-238. Antràs, Pol, Luis Garicano and Esteban Rossi-Hansberg, “O¤shoring in a Knowledge Economy,” Quarterly Journal of Economics, February 2006, 121 (1), 31-77. Broda, Christian and David E. Weinstein, “Globalization and the Gains from Variety,” Quarterly Journal of Economics, May 2006, CXXXI (2), 541-585. Acemoglu, Daron, Pol Antràs and Elhanan Helpman, “Contracts and Technology Adoption,” American Economic Review, June 2007, 97 (3), 916-943. Levchenko, Andrei A., “Institutional Quality and International Trade,”Review of Economic Studies, July 2007, 74 (3), 791-819. Helpman, E., “Trade, FDI, and the Organization of Firms,” Journal of Economic Literature, XLIV, 2006, 589-630. Antràs, Pol and Elhanan Helpman, “Contractual Frictions and Global Sourcing,” in E. Helpman, D. Marin and T. Verdier, The Organization of Firms in a Global Economy (Cambridge, MA: Harvard University Press), 2008. Melitz, Marc and Gianmarco Ottaviano, “Market Size, Trade, and Productivity” Review of Economic Studies, January 2008, 75,(1), 295-316. Costinot, Arnaud, “On the Origins of Comparative Advantage,” Journal of International Economics, vol. 77, 2009, 255-264. Antràs, P. and E. Rossi-Hansberg, “Organizations and Trade,”Annual Review of Economics, 2010. Arkolakis, C., “Market Penetrations Costs and the New Consumers Margin in International Trade,” Journal of Political Economy, Vol. 118, 2010, 1151-1199. Baldwin, R. and J. Harrigan, “Zeros, Quality and Space: Trade Theory and Trade Evidence,” American Economic Journal: Microeconomics, Vol. 3, 60–88, 2011. 15. Empirical Evidence Grubel, H.G. and P.J. Lloyd, Intra-Industry Trade: The Theory and Measurement of International Trade in Di¤ erentiated Products, 1975. Wickham, E. and H. Thompson, “An Empirical Analysis of Intra-Industry Trade and Multinational Firs”, in P.K.M. Tharakan and J. Cole (eds.), Intra-Industry Trade: Theory, Evidence and Extensions (London, Macmillan), 1989. 11

Brainard, S.L., “An Empirical Assessment of the Factor Proportions Explanation of Multinationals Sales,” NBER Working Paper No. 4580, 1993. Brainard, S.L., “An Empirical Assessment of the Proximity-Concentration Tradeo¤ Between Multinational Sales and Trade,” American Economic Review, 1997. Helpman, E., “Imperfect Competition and International Trade: Evidence from Fourteen Industrial Countries”, Journal of the Japanese and International Economies, 1(1987), 62-81. Hummels, D. and J. Levinsohn, “Monopolistic Competition and International Trade: Reconsidering the Evidence,”Quarterly Journal of Economics, August 1995, 110(3), 799-836. Davis, D.R. and D. Weinstein, “Economic Geography and Regional Production Structure: An Empirical Investigation,” European Economic Review, 1999, 43(2), 379407. Evenett, S.J. and W. Keller, “On Theories Explaining the Success of the Gravity Equation,” Journal of Political Economy, April 2002, 110(2), 281-316. Antweiler, W. and D. Tre‡er, “Increasing Returns and All That: A View from Trade,” American Economic Review, March 2002, 92(1), 93-119. Cie´slik, A., “Intraindustry Trade and Relative Factor Endowments,” Review of International Economics, November 2005, 13(5), 904-926. Debaere, P., “Monopolistic Competition and Trade Revisited: Testing the Model without Testing for Gravity,”Journal of International Economics 66(1), 2005, 249-266. Hummels, David and Peter J. Klenow. 2005. “The Variety and Quality of a Nation’s Exports.” American Economic Review 95: 704-723. Yeaple, S.R., “O¤shoring, Foreign Direct Investment, and the Structure of U.S. Trade,” Journal of the European Economic Association, April-May 2006, 4(2-3), 602-611. Broda, Christian and David E. Weinstein, “Globalization and the Gains from Variety,” Quarterly Journal of Economics, May 2006, CXXXI (2), 541-585. Nunn, N., “Relationship-Speci…city, Incomplete Contracts, and the Pattern of Trade,” Quarterly Journal of Economics CXXXII: 569-600, 2007. Defever, Fabrice and Farid Toubal, “Productivity and the Sourcing Modes of Multinational Firms: Evidence from French Firm-Level Data,” Center for Economic 12

Performance Discussion Paper No 842, December 2007. http://cep.lse.ac.uk/pubs/download/dp0842.pdf Bernard, Andrew B., J. Bradford Jensen, Stephen J. Redding and Peter K. Schott, “Firms in International Trade,” Journal of Economic Perspectives 21: 105-130, 2007. Nunn, Nathan and Daniel Tre‡er, “The Boundaries of the Multinational Firm: An Empirical Analysis,” in E. Helpman, D. Marin, and T. Verdier (eds.), The Organization of Firms in a Global Economy (Cambridge, MA: Harvard University Press), 2008. Lileeva, Alla and Daniel Tre‡er, “Improved Access to Foreign Markets Raises PlantLevel Productivity...for Some Plants,” Quarterly Journal of Economics CXXV: 1051-1099, 2010. 16. Commercial Policy Johnson, H.G., “Optimum Tari¤s and Retaliation,”Review of Economic Studies, 195354. Bhagwati, J., “On the Equivalence of Tari¤s and Quotas”, in R.E. Baldwin et al., Trade, Growth and the Balance of Payments, 1965. Baldwin, R.E., “The Case Against Infant Industry Protection”, Journal of Political Economy, 1969. Dixit, A., “Strategic Aspects of Trade Policy,” in T. Bewley (ed.), Advances in Economic Theory: Fifth World Congress (Cambridge, Cambridge University Press), 1987 (Section 2). 17. Distortions and Trade Policy Johnson, H.G., “Optimal Trade Intervention in the Presence of Domestic Distortions”, in R. Caves et al. (eds.) Trade, Growth and the Balance of Payments, Rand McNally, 1965. Bhagwati, J.N., “The General Theory of Distortions and Welfare”, in. J.N. Bhagwati et al., Trade, Balance of Payments, and Growth, North-Holland, 1971. Dixit, A., “Taxation in an Open Economy”, in A. Aurbach and M. Feldstein (eds.), Handbook of Public Economics, North-Holland, 1986. Maggi, G., “The Role of Multinational Institutions in International Trade Cooperation,” American Economic Review, March 1999, 89(1), 190-214. 13

Custom Unions and Economic Integration Lipsey, R., “The Theory of Custom Unions: A General Survey”, Economic Journal, 1960. Kemp, M. and H. Wan, “An Elementary Proposition Concerning the Formation of Custom Unions”, Journal of International Economics, February 1976, 6(1), 9597. Krugman, P.R., “Is Bilateralism Bad?”, in E. Helpman and A. Razin (eds.), International Trade and Trade Policy (Cambridge, Ma., and London, The MIT Press), 1991. Baldwin, R.E. and A.J. Venables, “Regional Economic Integration,”in Grossman and Rogo¤, 1995. Bagwell, K. and R.W. Staiger, “Multilateral Tari¤ Cooperation During the formation of Custom Unions,” Journal of International Economics, February 1997, 42(1-2), 91-123. McLaren, J., “Size, Sunk Costs, and Judge Bowker’s Objection to Free Trade,”American Economic Review, June 1997, 87(3), 400-20. Bagwell, K. and R.W. Staiger, “An Economic Theory of GATT,”American Economic Review, 1999, 89(1), 215-48. 18. Political Economy of Protection Krueger, A.O., “The Political Economy of the Rent-Seeking Society”, American Economic Review, 1974. Brock, W.A. and S.P. Magee, “The Economics of Special Interest Group Politics: The Case of the Tari¤”, American Economic Review (Papers and Proceedings), 1978. Bhagwati, J.N., “Directly-Unproductive, Pro…t-Seeking (DUP) Activities”, Journal of Political Economy, 1982. Mayer, W., “Endogenous Tari¤ Formation”, American Economic Review, 1984. Hillman, A.L. and H. Ursprung, “Domestic Politics, Foreign Interests, and International Trade Policy”, American Economic Review, 1988. Hillman, A.L., The Political Economy of Protection (London, Harwood Academic Publishers), 1989.

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Grossman, G.M. and E. Helpman, “Trade Wars and Trade Talks,”Journal of Political Economy, 1995. Rodrik, D., “Political Economy of Trade Policy”, in Grossman and Rogo¤, 1995. Grossman, G.M. and E. Helpman, “Foreign Investment with Endogenous Protection,” in Feenstra, R., G.M. Grossman and D. Irwin (eds.), The Political Economy of Trade Policy, 1996. Gawande, K. and U. Bandyopadhyay, “Is Protection for Sale? Evidence on the GrossmanHelpman Theory of Endogenous Protection,”Review of Economics and Statistics, 2000. E. Helpman, “Politics and Trade Policy,” in D.M. Kreps and K.F. Wallis (eds.), Advances in Economics and Econometrics: Theory and Applications (New York, Cambridge University Press), 1997. Krishna, P., “Regionalism and Multilateralism: A Political Economy Approach,”Quarterly Journal of Economics, 1998. Maggi, G. and A. Rodríguez-Clare, “The Value of Trade Agreements in the Presence of Political Pressure,” Journal of Political Economy, 1998. Mitra, D., D.D. Thomakos and M.A. Uluba¸so¼ glu, “‘Protection for Sale’in a Developing Country: Democracy versus Dictatorship,” Review of Economics and Statistics, August 2002, 84 (3), 497-508. Mitra, D., D.D. Thomakos and M.A. Uluba¸so¼ glu, “Can we Obtain Realistic Parameter Estimates for the ‘Protection for Sale’Model?” Canadian Journal of Economics, February 2006, 39 (1), 187-210. 19. Imperfect Competition and Trade Policy: Theory Spencer, B. and Brander, J., “International R&D Rivalry and Industrial Strategy”, Review of Economic Studies, 1983. Dixit, A., “International Trade Policy for Oligopolistic Industries”, Supplement to Economic Journal, 1984. Krugman, P.R., “Import Protection as Export Promotion”, in Kierzkowski, 1984. Venables, A.T., “Trade and Trade Policy under Imperfect Competition: The Case of Identical Products and Free Entry”, Journal of International Economics, 1985.

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Brander, J. and Spencer, B., “Export Subsidies and International Market Share Rivalry”, Journal of International Economics, 18(1985), 83-100. Dixit, A. and A.S. Kyle, “The Use of Protection and Subsidies for Entry Promotion and Deterrence”, American Economic Review, March 1985, 75(1), 139-52. Eaton, J. and Grossman, G., “Optimal Trade and Industrial Policy under Oligopoly”, Quarterly Journal of Economics, May 1986, 101(2), 383-406. Venables, A.J., “Trade and Trade Policy with Di¤erentiated Products: A Chamberlanian-Ricardian Model”, Economic Journal, 1987. Dixit, A., “Strategic Aspects of Trade Policy”, in T.F. Bewley (ed.) Advances in Economic Theory, Cambridge University Press, 1987. Krishna, K., “Trade Restrictions as Facilitating Practices”, Journal of International Economics, 1989. Romer, P. “New Goods, Old Theory, and the Welfare Costs of Trade Restrictions,” Journal of Development Economics, February 1994, 43(1), 5-38. Brander, J., “Strategic Trade Policy,” in Grossman and Rogo¤, 1995. Maggi, G., “Strategic Trade Policies with Endogenous Modes of Competition,”American Economic Review 86(1), March 1996, 237-58. 20. Imperfect Competition and Trade Policy: Evidence Krugman, P.R., “The U.S. Response to Foreign Industrial Targeting”, Brookings Papers on Economic Activity, 1986. Harris, R., “Applied General Equilibrium Analysis of Small Open Economies with Scale Economies and Imperfect Competition”, American Economic Review, 1986. Venables, A.J. and A. Smith, “Trade and Industrial Policy under Imperfect Competition”, Economic Policy, 1986. Baldwin, R.E. and P.R. Krugman, “Market Access and International Competition: A Simulation Study of 16 K Random Access Memories”, in Feenstra, 1988. Smith, A. and Venables, A.J., “Completing the Internal Market in the European Community: Some Industry Simulations”, European Economic Review, September 1988, 32(7), 1501-25. Feenstra, R.C., “Gains from Trade in Di¤erentiated Products: Japanese Compact Trucks”, in Feenstra, 1988. 16

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Newbery, D. and Stiglitz, J., “Pareto Inferior Trade”, Review of Economic Studies, January 1984, 51(1), 1-12. Eaton, J. and Grossman, G.M., “Tari¤s as Insurance”, Canadian Journal of Economics, May 1985, 18(2), 258-72. Dixit, A., “Trade and Insurance with Moral Hazard”, Journal of International Economics, November 1987, 23(3-4), 201-20. Grossman, G.M. and Horn, H., “Infant Industry Protection Reconsidered: The Case of Information Barriers to Entry”, Quarterly Journal of Economics, November 1988, 103(4), 767-87. Dixit, A., “Trade Policy with Imperfect Information”, in Jones, R.W. and Krueger, A. (eds.), The Political Economy of International Trade, 1989. Dixit, A., “Trade and Insurance with Adverse Selection”, Review of Economic Studies, April 1989, 56(2), 235-47. Dixit, A.,“Trade and Insurance with Unobservable Outcomes”, Quarterly Journal of Economics, February 1989, 104(1), 195-203. 23. Dynamics of North-South Trade Krugman, P.R., “A Model of Innovation, Technology Transfer and the World Distribution of Income”, Journal of Political Economy, 1979. Flam, H. and E. Helpman, “Vertical Product Di¤erentiation and North-South Trade”, American Economic Review, December 1987, 77(5), 810-22. Stokey, N.L., “The Volume and Composition of Trade between Rich and Poor Countries”, Review of Economic Studies, January 1991, 58(1), 63-80. Vernon, R., “International Investment and International Trade in the Product Cycle”, Quarterly Journal of Economics, 1966. Grossman and Helpman, 1991, chapter 12. Krugman, P.R., ”A ’Technology Gap’Model of International Trade”, in Jugenfelt and Hague. Young, A., “Learning by Doing and the Dynamic E¤ects of International Trade”, Quarterly Journal of Economics, 1991. Grossman and Helpman, 1991, chapter 11. 18

Grossman, G. and E. Helpman, “Quality Ladders and Product Cycles”, Quarterly Journal of Economics, 1991. Grossman, G. and E. Helpman, “Endogenous Product Cycles”, Economic Journal, 1991. Helpman, Elhanan, “Innovation, Imitation and Intellectual Property Rights,” Econometrica, November 1993, 61(6), 1247-80. Brezis, E., P.R. Krugman and D. Tsiddon, “Leapfrogging in International Competition”, American Economic Review, December 1993, 83(5), 1211-19. Grossman, Gene and Edwin Lai, “International Protection of Intellectual Property,” American Economic Review 94(5), 2004, 1635-1653. 24. Evidence on R&D, Trade and Growth Ben-David, Dan, “Equalizing Exchange: Trade Liberalization and Income Convergence,” Quarterly Journal of Economics, Vol. 108, 1993, 653-679. Coe, D.T. and E. Helpman, “International R&D Spillovers,” European Economic Review, May 1995, 39(5), 859-887. Eaton, J. and S. Kortum, “Trade in Ideas: Patenting and Productivity in the OECD,” Journal of International Economics, 1996. Coe, David T., Helpman, Elhanan and Ho¤maister, Alexander W., “North South R&D Spillovers”, Economic Journal, Vol. 107, 1997, 134-149. Engelbrecht, Hans-Jurgen, “International R&D Spillovers, Human Capital and Productivity in OECD Economies: An Empirical Investigation,”European Economic Review, Vol. 41, 1997, 1479-1488. Bernstein, Je¤rey I. and Mohnen, Pierre, “International R&D Spillovers Between US and Japanese R&D Intensive Sectors,” Journal of International Economics, Vol. 44, 1998, 315-338. Frankel, Je¤rey A. and Romer, David, “Does Trade Cause Growth?” American Economic Review, June 1999, 89(3), 379-399. Eaton, J. and S. Kortum, “International Technology Di¤usion: Theory and Measurement,” International Economic Review, 1999. Howitt, Peter, “Endogenous Growth and Cross-Country Income Di¤erences,” American Economic Review, Vol. 90, 2000, 829-846. 19

Rodriguez, Francisco and Rodrik, Dani, “Trade Policy and Economic Growth: A Skeptic’s Guide to the Cross-National Evidence,”NBER Macroeconomics Annual, Vol. 15, 2001. Acemoglu, Daron and Ventura, Jaume, “The World Income Distribution,” NBER Working Paper 8083, 2001. Acemoglu, Daron and Fabrizio Zilibotti, “Productivity Di¤erences,”Quarterly Journal of Economics, Vol. CXVI, 2001, 563-606. Lichtenberg, Frank and Bruno van Pottelsberghe de la Potterie, “Does Foreign Direct Investment Transfer Technology Across Borders?” Review of Economics and Statistics, Vol. 83, 2001, 490-497. Keller, W., “Geographic Localization of International,” American Economic Review, March 2002, 92(1), 120-142. DeJong, David N. and Marla Ripoll, “Tari¤s and Growth: An Empirical Exploration of Contingent Relationships,” Review of Economics and Statistics, Vol. 88, 2006, 625-640. Nunn, Nathan and Daniel Tre‡er, “The Structure of Tari¤s and Long-Term Growth”, American Economic Journal: Macroeconomics, Vol. 2, 2010, 158-194. 25. Trade, Technology and Wages Lawrence, R. and M. Slaughter, “International Trade and American Wages in the 1980s: Giant Sucking Sound or Small Hiccup?”, Brookings Papers on Economic Activity, Microeconomics 2(1993), 161-210. Sachs, J. and H. Shatz, “Trade and Jobs in US Manufacturing”, Brookings Papers on Economic Activity, 1(1994), 1-69. Wood, A., North-South Trade, Employment, and Inequality (Oxford: Clarendon Press), 1994. Leamer, E.E., “Trade, Wages and Revolving Door Ideas”, NBER Working Paper No. 4716, 1994. Jones, R.W. and S.L. Engerman, “Trade, Technology, and Wages: A Tale of Two Countries,” American Economic Review (Papers and Proceedings), May 1996, 86(2), 35-40.

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Krugman, P.R., “Trade and Wages,” in D.M. Kreps and K.F. Wallis (eds.), Advances in Economics and Econometrics: Theory and Applications (New York, Cambridge University Press), 1997. Davis, R.D., “Does European Unemployment Prop Up American Wages?”, American Economic Review, June 1998, 88(3), 478-94. Feenstra, R.C. and Hanson, G.H., “The Impact of Outsourcing and High-Techno-logy Capital on Wages: Estimates for the United States, 1979-1990,”Quarterly Journal of Economics, August 1999, 114(3), 907-40. Leamer, E.E., “What’s the Use of Factor Contents,?” Journal of International Economics, February 2000, 50(1): 17-49. Krugman, P.R., “Technology, Trade and Factor Prices,”Journal of International Economics, February 2000, 50(1): 51-71. 26. Diversity Grossman, G.M. and G. Maggi, “Diversity and Trade,” American Economic Review, December 2000, 90(5), 1255-1275. Ohnsorge, Franziska and Daniel Tre‡er, “Sorting It Out: International Trade with Heterogeneous Workers,” Journal of Political Economy, 2007, 115(5), 868–892. Costinot, Arnaud and Jonathan Vogel, “Matching and Inequality in the World Economy,” Journal of Political Economy (forthcoming), 2010, http://econ-www.mit.edu/…les/5594 27. Labor Market Frictions Davidson, Carl, Lawrence Martin and Steven Matusz, “Trade and Search Generated Unemployment,” Journal of International Economics 1999, 48, pp. 271-299.

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