Trade in Ideal Varieties: Theory and Evidence

Abstract

Models with constant-elasticity of substitution (CES) preferences are commonly employed in the international trade literature because they provide a tractable way to handle product differentiation in general equilibrium. However this tractability comes at the cost of generating a set of counter-factual predictions regarding cross-country variation in export… (More)

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Cite this paper

@inproceedings{Hummels2005TradeII, title={Trade in Ideal Varieties: Theory and Evidence}, author={David Hummels and Volodymyr Lugovskyy}, year={2005} }