Title: The impact of trade on intraindustry reallocation and aggregate industry productivity
Description: "Melitz (2003) demonstrates that greater trade openness raises industry productivity via a selection effect and via a production re-allocation effect.  Our comment points out that the set-up assumed in the Melitz model displays a trade off between static and dynamic efficiency gains.  That is, although freer trade improves industry productivity in a level sense, it harms it in a growth sense.  To make this point as simply as possible, we introduce a slight modification to the model that endogenises the growth rate of industry productivity and we show that liberalisation slows growth"--National Bureau of Economic Research web site.
Subjects: Industrial productivity, Intra-industry trade