We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.
To save content items to your account,
please confirm that you agree to abide by our usage policies.
If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account.
Find out more about saving content to .
To save content items to your Kindle, first ensure coreplatform@cambridge.org
is added to your Approved Personal Document E-mail List under your Personal Document Settings
on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part
of your Kindle email address below.
Find out more about saving to your Kindle.
Note you can select to save to either the @free.kindle.com or @kindle.com variations.
‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi.
‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.
The field of international trade has advanced in the past decade through a healthy exchange between new observations on firms in export markets and new theories that have introduced producer heterogeneity into trade models. As a result, we now have general equilibrium theories of trade that are consistent with various dimensions of both the aggregate and the firmlevel data. Furthermore, we have a much better sense of the magnitudes of key parameters underlying these theories.
This flurry of activity at the firm level has left the core aggregate relationships among trade, factor costs, and welfare largely untouched, however. Although we now have much better microfoundations for aggregate trade models, their predictions aremuch like those of the Armington model – for years a workhorse of quantitative international trade. Arkolakis, Costinot, and Rodríguez-Clare (2012) emphasized this (lack of) implication of the recent literature for aggregate trade.
We argue that a primary reason why models of heterogeneous producers deliver so little in the way of modification of how we think about aggregates is the device – initiated in the trade literature by Dornbusch, Fischer, and Samuelson (1977) – of treating the set of products as a continuum.
Recommend this
Email your librarian or administrator to recommend adding this to your organisation's collection.