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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.