Quantifying a vertical differentiation trade model

We build a trade model that simultaneously embeds vertical product
differentiation, within-country heterogeneous income, heterogeneous goods, and
many countries. Under some specifications of costs and preferences, we can
establish the existence of the general equilibrium and obtain a very tractable
quantification model. We estimate all of the model parameters by applying the model
properties on OECD countries. We finally quantify the effect of trade costs
and economic shocks -- like Brexit -- on each country's share of high-quality goods.