FBBA Lecture 2024: The Uncharted Waters of International Trade.

This article provides a comprehensive overview of recent advances and future directions in international trade research, emphasizing the emergence of firm-level approaches, global value chains (GVCs), and quantitative trade models over the past 25 years. It highlights key empirical findings, such as the skewed distribution of exporters and importers and the importance of firm heterogeneity in trade participation, which have reshaped theoretical frameworks like the Melitz model. The paper identifies several underexplored theoretical areas—including oligopolistic competition, geoeconomics (the intersection of trade and national security), and behavioral economics—and calls for improved empirical data, especially on trade in services and cross-border firm-level transactions, to better capture the complexity of modern trade. Finally, it discusses how advances in big data and artificial intelligence may transform trade policy design, while cautioning that fundamental economic challenges, such as the knowledge problem, remain.