Distorted Gravity: The Intensive and Extensive Margins of International Trade
在异质性企业贸易模型中证明，替代弹性对贸易的集约边际和扩展边际有相反影响；当企业生产率服从帕累托分布时，替代弹性会削弱而非放大贸易壁垒对贸易流的影响。
By considering a model with identical firms, Krugman (1980) predicts that a higher elasticity of substitution between goods magnifies the impact of trade barriers on trade flows. In this paper, I introduce firm heterogeneity in a simple model of international trade. I prove that the extensive margin and the intensive margin are affected by the elasticity of substitution in exact opposite directions. When the distribution of productivity across firms is Pareto, the predictions of the Krugman model with representative firms are overturned: the impact of trade barriers on trade flows is dampened by the elasticity of substitution, and not magnified.