Understanding and Testing the Foundations of International Trade with Micro Data

This volume brings together fifteen papers that advance our understanding of international trade and trade policy across three major research programs. Part I examines trade and policy in vertically related oligopolistic markets and tests the theoretical foundations of international trade under imperfect competition. Part II pioneers the use of a natural historical experiment to test general equilibrium trade theory, linking foundational models to empirical domains consistent with their theoretical frameworks. Part III proposes an empirical identification strategy to estimate the impact of the container revolution on the growth of world trade.The introductory chapter employs Thomas Kuhn's notion of paradigm shifts as an organizing principle to trace the intellectual evolution of these three research programs. It also highlights the connection between the "call" of the new empirical industrial organization literature (Part I) and the first application of a natural historical experiment to test economic theory (Part II).