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Handbook of International Economics - 1st Edition - ISBN: 9780444543141, 9780444543158

Handbook of International Economics, Volume 4

1st Edition

Editors: Gita Gopinath Elhanan Helpman Kenneth Rogoff
eBook ISBN: 9780444543158
Hardcover ISBN: 9780444543141
Imprint: North Holland
Published Date: 22nd February 2014
Page Count: 776
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Table of Contents


Introduction to the Series


1: Heterogeneous Firms and Trade

1 Introduction

2 Empirical Evidence

3 General Setup

4 Closed Economy Equilibrium

5 Open Economy with Trade Costs

6 Quantitative Predictions

7 Factor Abundance and Heterogeneity

8 Trade and Market Size

9 Endogenous Firm Productivity

10 Factor Markets

11 Conclusion


2: Multinational Firms and the Structure of International Trade

1 Introduction

2 Stylized Facts

3 Benchmark Model: An Extended Krugman (1980) Model

4 The Proximity-Concentration Hypothesis

5 Vertical Expansion

6 MultiCountry Models

7 Multinational Firm Boundaries

8 Conclusion


3: Gravity Equations: Workhorse,Toolkit, and Cookbook

1 Introduction

2 Micro-Foundations for Gravity Equations

3 Theory-Consistent Estimation

4 Gravity Estimates of Policy Impacts

5 Frontiers of Gravity Research

6 Directions for Future Research

7 Conclusion


4: Trade Theory with Numbers: Quantifying the Consequences of Globalization

1 Introduction

2 Getting Started

3 Beyond Armington

4 Evaluating Trade Policy

5 Numbers We Can Believe In?

6 “Micro” versus “Macro” Numbers

7 Life Without Gravity

8 Concluding Remarks


5: Domestic Institutions as a Source of Comparative Advantage

1 Introduction

2 Contracting and Property-Right Institutions: Impacts on Comparative Advantage

3 Informal Institutions and their Impacts on Comparative Advantage

4 Policies and the Indirect Impacts of Institutions on Comparative Advantage

5 The Impact of Trade and Comparative Advantage on Domestic Institutions

6 Conclusion


6: International Trade Agreements

1 Introduction

2 The Motives for Trade Agreements

3 The Design of Trade Agreements

4 Regional Trade Agreements

5 Conclusion


7: International Prices and Exchange Rates

1 Introduction

2 Empirical Evidence

3 A Simple Framework to Interpret Empirical Findings

4 Models with Desired Variable Markups

5 Other Models of Incomplete Pass-through

6 Industry Equilibrium

7 General Equilibrium

8 Conclusion

9 Appendix


8: Exchange Rates and Interest Parity

1 Exchange Rates and Interest Parity

2 Monetary Sticky-Price Models of Exchange Rates

3 Empirical Studies of Exchange Rates

4 Ex Ante Excess Returns and the Uncovered Interest Parity Puzzle

5 Conclusions


9: Assessing International Efficiency

1 Introduction

2 A Methodology for Assessing International Efficiency

3 Assessing Long-Run Efficiency

4 Assessing Efficiency in International Business Cycles

5 Conclusion

6 Appendix: Proof of Proposition 1


10: External Adjustment, Global Imbalances, Valuation Effects

1 Introduction

2 Stylized Facts

3 Long-Term Capital Flows in the Neoclassical Growth Model

4 Models of Global Imbalances

5 External Balance Sheets, Valuation Effects, and Adjustment

6 The International Monetary and Financial System

7 Conclusion


11: Sovereign Debt

1 Introduction: Conceptual Issues

2 Empirical Facts

3 A Benchmark Framework

4 Richer Notions of “Default”

5 Self-fulfilling Debt Crises

6 Incomplete-Market Models and their Quantitative Implementation

7 Concluding Remarks


12: International Financial Crises

1 Introduction

2 Fiscal-Monetary Imbalances

3 Overvaluation, Unemployment, and Multiple Equilibria

4 Financial Flows, Sudden Stops, and Balance Sheet Effects

5 Spread Spirals and Rollover Crises

6 Sources of Fragility

7 Concluding Remarks




What conclusions can be drawn from recent advances in international trade and international macroeconomics? New datasets, theoretical models, and empirical studies have resulted in fresh questions about the world trade and payment system. These chapters--six on trade and six on international macroeconomics--reveal the richness that researchers have uncovered in recent years. The chapters on foreign trade present, among other subjects, new integrated multisector analytical frameworks, the use of gravity equations for the estimation of trade flows, the role of domestic institutions in shaping comparative advantage, and international trade agreements. On international macroeconomics, chapters explore the relation between exchange rates and other macroeconomic variables; risk sharing, allocation of capital across countries, and current account dynamics; and sovereign debt and financial crises. By addressing new issues while enabling deeper and sharper analyses of old issues, this volume makes a significant contribution to our understanding of the global economy.

Key Features

  • Systematically illuminates and interprets recent developments in research on international trade and international macroeconomics
  • Focuses on newly developing questions and opportunities for future research
  • Presents multiple perspectives on ways to understand the global economy


Graduate students and professors worldwide working in all subdisciplines of economics and finance. Secondary audience will include researchers working in international trade and international macroeconomics.


No. of pages:
© North Holland 2014
22nd February 2014
North Holland
eBook ISBN:
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"...a must-have reference book for all those who are engaged in researching India’s economy that is today plagued by widening current account deficit, falling currency, high inflation, not-too-comfortable fiscal deficiencies..." --The IUP Journal of Applied Economics, Vol. XIII, No. 4, 2014

"...this book is an accolade worth having by every front-end researcher, for it offers on a platter the current status of research in international economies." --The IUP Journal of Applied Economics, October 2014

"Since the last volume of the Handbook of International Economics appeared nearly two decades ago, researchers in the field have made massive intellectual progress on topics ranging from firm-level dynamics, to empirical trade models, to financial crises, to global capital-flow imbalances. This fourth volume of the Handbook provides the clear and comprehensive update that students and researchers have so urgently needed." --Maurice Obstfeld, University of California, Berkeley

"The Handbook series is like the Olympic games of economics: drawing together all the star contributions of international economics in single location, with a unifying notation and modeling framework. This volume will be indispensable reading for faculty and advanced students alike and will influence the field for years to come."  --Robert C. Feenstra, University of California, Davis

"Volume 4 is as indispensable and comprehensive as ever, yet fully updated for the perspectives, issues and important empirical realities in international economics today.  Every academic who touches these fields will want to read it." --Kenneth A. Froot. Harvard Business School

"This volume sustains the tradition of excellence of earlier Handbooks of International Economics. The reader is expertly brought up to date on those areas of international economics which have taken giant leaps forward - globalization, determinants of trade flows, preferential trade arrangements, sovereign debt, financial crises, and more. The volume is a must-have refernce for economists wanting to catch up with the field." --Anne Krueger, Johns Hopkins University

Ratings and Reviews

About the Editors

Gita Gopinath

Winner of the Bhagwati Prize for the best paper published in the Journal of International Economics for the two years 2003 and 2004, she is a member of the American Economic Review editorial board.

Affiliations and Expertise

Harvard University, Cambridge MA, USA

Elhanan Helpman

Elhanan Helpman is Galen L. Stone Professor of International Trade, Harvard University, Cambridge MA, USA

Affiliations and Expertise

Harvard University, Cambridge MA, USA

Kenneth Rogoff

A member of the National Academy of Sciences, he is the author most recently of This Time Is Different: Eight Centuries of Financial Folly (with Carmen M. Reinhart), 2009.

Affiliations and Expertise

Harvard University, Cambridge, MA, USA