The paper "New Trade Models, Same Old Gains?" by Costas Arkolakis, Arnaud Costinot, and Andrés Rodríguez-Clare explores the impact of new micro-level data and trade models on the welfare gains from trade. Despite significant advancements in understanding micro-level dynamics, the authors find that the welfare gains from trade remain largely unchanged. They demonstrate that the welfare predictions of a broad class of trade models depend on two key statistics: the share of expenditure on domestic goods ($\lambda$) and the elasticity of imports with respect to variable trade costs ($\varepsilon$). Using these statistics, they derive a formula for the change in real income due to foreign shocks, which is consistent across different trade models. The paper also discusses the theoretical relationship between trade and welfare, focusing on the Armington model, and provides extensions to more complex models. It concludes by highlighting the importance of the gravity equation in estimating the trade elasticity and the implications for welfare analysis.The paper "New Trade Models, Same Old Gains?" by Costas Arkolakis, Arnaud Costinot, and Andrés Rodríguez-Clare explores the impact of new micro-level data and trade models on the welfare gains from trade. Despite significant advancements in understanding micro-level dynamics, the authors find that the welfare gains from trade remain largely unchanged. They demonstrate that the welfare predictions of a broad class of trade models depend on two key statistics: the share of expenditure on domestic goods ($\lambda$) and the elasticity of imports with respect to variable trade costs ($\varepsilon$). Using these statistics, they derive a formula for the change in real income due to foreign shocks, which is consistent across different trade models. The paper also discusses the theoretical relationship between trade and welfare, focusing on the Armington model, and provides extensions to more complex models. It concludes by highlighting the importance of the gravity equation in estimating the trade elasticity and the implications for welfare analysis.