DP19842 The Uncharted Waters of International Trade
The field of international trade has undergone significant theoretical and empirical advancements over the last twenty-five years. A key breakthrough has been the emergence of firm-level approaches to studying exporting, importing, and global value chains. The field has also experienced a quantitative revolution, driven by medium-scale models that rapidly assess the implications of trade cost shocks on real income. Additionally, a branch of the empirical literature has unshackled itself from the discipline of theoretical frameworks and from traditional data sources. Yet, several underexplored areas, or `uncharted waters,' remain in international trade research. I outline new potential areas for theoretical research, including incorporating oligopolistic (strategic) behavior into core models, and fostering greater cross-disciplinary collaboration with other fields in economics and social sciences, such as behavioral economics or political science. I also discuss potential uncharted waters for empirical trade economists, while identifying potential new sources of data and ways in which official trade statistics could be improved. Finally, I explore how big data and artificial intelligence could reshape the design of international trade policy in coming years.
