Abstract
Comovement in Old and New Trade: This paper explores the effect of trade on the comovement of aggregate output between countries, using tractable
expressions from International Trade frameworks. The author finds that trade’s impact is ambiguous, influenced by opposing forces of cost and clearing channels. Differences between Old and New Trade Theories lie in mathematical expressions, equilibrium variables, and calibration, with only calibration being quantitatively significant. The Fundamental Openness of Small Open Economies: The study develops an analytical framework to compare the significance of shocks to terms of
trade versus total factor productivity shocks in causing consumption volatility in commodity-exporting economies. The equilibria of these models depend on endogenous openness, and differences between models are represented by two elasticities. When calibrated to match openness, the models yield nearly identical predictions about the relative importance of terms of trade. Structural Change in Open Economies with Scale Effects: The author develops a trade model to examine the impact of deglobalization on GDP per capita across countries. The model highlights the importance of scale effects in world trade increases and shows that high bilateral trade costs can cause substantial GDP losses for some economies. Structural change effects play a minor role in these losses.