How big are the gains from trade?
One of the most-mentioned trade papers of the last couple years is “New Trade Models, Same Old Gains?” by Arkolakis, Costinot & Rodriguez-Clare, now published in the AER. Their theoretical work...
View ArticleHarry Johnson on Staffan Linder
I haven’t seen a book review like this in some time. Harry Johnson didn’t hold back while expressing his opinion of Linder (1961). This is the closing paragraph of his rather blunt five-page review: In...
View ArticleMelitz and Redding on heterogeneous firms and gains from trade
In a recent VoxEU column, Marc Melitz and Stephen Redding describe the logic of Melitz (Ecma, 2003) and Arkolakis, Costinot, and Rodriguez-Clare (AER, 2012). Those should be familiar to Trade Diversion...
View ArticleWell, that took a while…
In August 1935, Gottfrieb Haberler wrote (Theory of International Trade, Preface to the English Edition): [I]t seems to me that the theory of international trade, as outlined in the following pages,...
View ArticleLinkages between international trade and urban economics
Keith Head, Thierry Mayer, and Gianmarco Ottaviano have written a review of the latest Handbook of Regional and Urban Economics, published in 2015. The prior edition was published back in 2004. Part of...
View ArticleCo-authoring is not about comparative advantage
Comparative advantage is one of our field’s defining insights and “an essential part of every economist’s intellectual toolkit“. The principle is both true and non-obvious, so understanding it...
View ArticleWhat’s an “iceberg commuting cost”?
In the recent quantitative spatial economics literature, the phrase “iceberg commuting cost” appears somewhat often. The phrase primarily appears in papers coauthored by Stephen Redding (ARSW 2015, RR...
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Spatial Economics for Granular Settings
Economists studying spatial connections are excited about a growing body of increasingly fine spatial data. We’re no longer studying country- or city-level aggregates. For example, many folks now...
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A reminder about the definition of trade diversion
It’s likely been more than a decade since a Trade Diversion blog post actually mentioned trade creation and trade diversion. Having missed numerous opportunities in recent years, I won’t pass up...
View ArticleExact hat algebra concerns comparative statics, not calibration
The phrase “exact hat algebra” is used by trade and spatial economists far more often than it is clearly defined. In “Spatial Economics for Granular Settings” (September 2023), Felix Tintelnot and I...
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