Not All Trade Restrictions are Created Equally ∗

  title={Not All Trade Restrictions are Created Equally ∗},
  author={M. T. Cole},
There has been great focus in the recent trade theory literature on the introduction of firm heterogeneity into trade models. This introduction has highlighted the importance of the entry/exit decision of firms in response to changes in trade barriers. However, it is typical in many of these models to use iceberg transport costs as a general form of trade barriers that can be interchangeable with ad valorem tariffs. I show that this is not always an appropriate conclusion. Specifically, I… CONTINUE READING

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