Outputs (9)

The small open economy in a generalized gravity model (2024)
Journal Article
Demidova, S., Kucheryavyy, K., Naito, T., & Rodríguez-Clare, A. (2024). The small open economy in a generalized gravity model. Journal of International Economics, 152, Article 103997. https://doi.org/10.1016/j.jinteco.2024.103997

To provide sharp answers to basic questions in international trade, a standard approach is to focus on a small open economy (SOE). Whereas the classic tradition is to define a SOE as an economy that takes world prices as given, in the new trade liter... Read More about The small open economy in a generalized gravity model.

The Textbook Case for Industrial Policy: Theory Meets Data (2024)
Journal Article
Bartelme, D., Mit, A. C., Donaldson, D., & Rodriguez-Clare, A. (in press). The Textbook Case for Industrial Policy: Theory Meets Data. Journal of Political Economy,

The textbook case for industrial policy is well understood. If some sectors are subject to external economies of scale, whereas others are not, a government should subsidize the first group of sectors at the expense of the second. Little is known, ho... Read More about The Textbook Case for Industrial Policy: Theory Meets Data.

Spatial Equilibria: The Case of Two Regions (2023)
Journal Article
Kucheryavyy, K., Lyn, G., & Rodríguez-Clare, A. (in press). Spatial Equilibria: The Case of Two Regions. Journal of International Economics,

In this paper we characterize the set of equilibria in a generalized version of the canonical two-region economic geography model that nests the class of models in Allen and Arkolakis (2014) as well as Krugman (1991) and features an input-output loop... Read More about Spatial Equilibria: The Case of Two Regions.

The Intensive Margin in Trade: How Big and How Important? (2023)
Journal Article
Fernandes, A. M., Klenow, P. J., Meleshchuk, S., Pierola, M. D., & Rodríguez-Clare, A. (2023). The Intensive Margin in Trade: How Big and How Important?. American Economic Journal: Macroeconomics, 15(3), 320-354. https://doi.org/10.1257/mac.20200269

In benchmark trade models that feature a constant trade elastic-ity, bilateral exports vary entirely on the intensive margin (exports per firm) or entirely on the extensive margin (number of firms). Our empirical analysis documents that roughly one-h... Read More about The Intensive Margin in Trade: How Big and How Important?.

Grounded by Gravity: A Well-Behaved Trade Model with Industry-Level Economies of Scale (2023)
Journal Article
Kucheryavyy, K., Lyn, G., & Rodríguez-Clare, A. (2023). Grounded by Gravity: A Well-Behaved Trade Model with Industry-Level Economies of Scale. American Economic Journal: Macroeconomics, 15(2), 372-412. https://doi.org/10.1257/mac.20190156

We propose a model to study the role of industry-level external economies of scale in open economies. If the elasticity governing the strength of external economies is below the inverse of the trade elasticity in each industry, then specialization un... Read More about Grounded by Gravity: A Well-Behaved Trade Model with Industry-Level Economies of Scale.

Slicing the Pie: Quantifying the Aggregate and Distributional Effects of Trade (2022)
Journal Article
Galle, S., Rodríguez-Clare, A., & Yi, M. (2023). Slicing the Pie: Quantifying the Aggregate and Distributional Effects of Trade. Review of Economic Studies, 90(1), 331-375. https://doi.org/10.1093/restud/rdac020

We develop a multi-sector gravity model with heterogeneous workers to quantify the aggregate and group-level welfare effects of trade. The model generalizes the specific-factors intuition to a setting with labour reallocation, leads to a parsimonious... Read More about Slicing the Pie: Quantifying the Aggregate and Distributional Effects of Trade.

Micro to Macro: Optimal Trade Policy With Firm Heterogeneity (2020)
Journal Article
Costinot, A., Rodríguez-Clare, A., & Werning, I. (2020). Micro to Macro: Optimal Trade Policy With Firm Heterogeneity. Econometrica, 88(6), 2739-2776. https://doi.org/10.3982/ECTA14763

The empirical observation that "large firms tend to export, whereas small firms do not" has transformed the way economists think about the determinants of international trade. Yet, it has had surprisingly little impact on how economists think about t... Read More about Micro to Macro: Optimal Trade Policy With Firm Heterogeneity.

The Elusive Pro-Competitive Effects of Trade (2018)
Journal Article
Arkolakis, C., Donaldson, D., Costinot, A., & Rodríguez-Clare, A. (2019). The Elusive Pro-Competitive Effects of Trade. Review of Economic Studies, 86(1), 46-80. https://doi.org/10.1093/restud/rdx075

We study the gains from trade liberalization in models with monopolistic competition, firm-level heterogeneity, and variable markups. For a large class of demand functions used in the international macro and trade literature, we derive a parsimonious... Read More about The Elusive Pro-Competitive Effects of Trade.

Trade, Domestic Frictions, and Scale Effects (2016)
Journal Article
Ramondo, N., Rodríguez-Clare, A., & Saborío-Rodríguez, M. (2016). Trade, Domestic Frictions, and Scale Effects. American Economic Review, 106(10), 3159-3184. https://doi.org/10.1257/aer.20141449

Because of scale effects, idea-based growth models imply that larger countries should be much richer than smaller ones. New trade models share the same counterfactual feature. In fact, new trade models exhibit other counterfactual implications associ... Read More about Trade, Domestic Frictions, and Scale Effects.