世界経済・社会統計 = World development indicators

The gravity model has been widely used to infer substantial trade flow effects of institutions such as customs unions and exchange rate mechanisms. McCallum [1995] found that the US-Canada border led to trade between provinces that is a factor 22 (2,200%) times trade between states and provinces, a spectacular puzzle in light of the low formal barriers on this border. We show that the gravity model usually estimated does not correspond to the theory behind it. We solve the 'border puzzle' by applying the theory seriously. We find that national borders reduce trade between the US and Canada by about 44%, while reducing trade among other industrialized countries by about 30%. McCallum's spectacular headline number is the result of a combination of omitted variables bias and the small size of the Canadian economy. Within-Canada trade rises by a factor 6 due to the border. In contrast, within-US trade rises 25%.

https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=256086

Gravity with Gravitas: A Solution to the Border Puzzle

This article builds a theoretical framework to help explain governance patterns in global value chains It draws on three streams of literature ‐ transaction costs economics, production networks, and technological capability and firm-level learning ‐ to identify three variables that play a large role in determining how global value chains are governed and change These are: (1) the complexity of transactions, (2) the ability to codify transactions, and (3) the capabilities in the supply-base The theory generates five types of global value chain governance ‐ hierarchy, captive, relational, modular, and market ‐ which range from high to low levels of explicit coordination and power asymmetry The article highlights the dynamic and overlapping nature of global value chain governance through four brief industry case studies: bicycles, apparel, horticulture and electronics

/pdf/the-governance-of-global-value-chains-3dmchifo7i.pdf

The governance of global value chains

Gravity equations have been widely used to infer trade flow effects of various institutional arrangements. We show that estimated gravity equations do not have a theoretical foundation. This implies both that estimation suffers from omitted variables bias and that comparative statics analysis is unfounded. We develop a method that (i) consistently and efficiently estimates a theoretical gravity equation and (ii) correctly calculates the comparative statics of trade frictions. We apply the method to solve the famous McCallum border puzzle. Applying our method, we find that national borders reduce trade between industrialized countries by moderate amounts of 20-50 percent.

/pdf/gravity-with-gravitas-a-solution-to-the-border-puzzle-4dn7us6msp.pdf

This paper develops techniques for empirically analyzing demand and supply in differentiated products markets and then applies these techniques to analyze equilibrium in the U.S. automobile industry. Our primary goal is to present a framework which enables one to obtain estimates of demand and cost parameters for a class of oligopolistic differentiated products markets. These estimates can be obtained using only widely available product-level and aggregate consumer-level data, and they are consistent with a structural model of equilibrium in an oligopolistic industry. When we apply the tech- niques developed here to the U.S. automobile market, we obtain cost and demand parameters for (essentially) all models marketed over a twenty year period.

/pdf/automobile-prices-in-market-equilibrium-1w0xnf91hi.pdf

Automobile prices in market equilibrium

In this paper we consider recent proposals to auction U.S. import quotas, using the funds so obtained to encourage relocation out of the protected industries. We first discuss the design of quota auctions so as to maximize revenue for the government. We then consider why quota auctions should be used at all, rather than simply using tariffs, or immediately opening trade and compensating people with income transfers. We argue that the information available to the government, or lack thereof, is a critical factor in understanding these policies.

/pdf/designing-policies-to-open-trade-7cprridmna.pdf

Designing Policies to Open Trade

In this paper we quantify the potential revenue available to the US from auctioning import quotas, and the resulting drop in foreign producer surplus relative to free trade Previous estimates of auction revenue are in the range of $3 7-515 billion for 1986 or 1987 Using simulation results from computable partial or general equilibrium models, we find that this revenue gain would be at the expense of a large drop in foreign producer surplus Ignoring textiles and apparel, the potential auction revenue is $1 3-215 billion, and the foreign loss is $05-O7 billion relative to free trade One alternative to auction quotas is a system of tariff-rate quotas, which are designed to keep supplier countries welfare equal to that in free trade We calculate that the tariff-rate quotas could raise $067-155 billion in revenue for the US While this amount is less than available through auction quotas, it could still fund a significant program of worker adjustment, and would mitigate the foreign response

Auctioning U.S. Import Quotas, Foreign Response, and Alternative Policies

A major challenge facing statistical agencies is the problem of adjusting price and quantity indexes for changes in the availability of commodities. This problem arises in the scanner data context as products in a commodity stratum appear and disappear in retail outlets. Hicks suggested a reservation price methodology for dealing with this problem in the context of the economic approach to index number theory. Feenstra and Hausman suggested specific methods for implementing the Hicksian approach. The present paper evaluates these approaches and suggests some alternative approaches to the estimation of reservation prices. The various approaches are implemented using some scanner data on frozen juice products that are available online.

Estimating the Benefits of New Products: Some Approximations

In this paper we consider recent proposals to auction U.S. import quotas. using the funds so obtained to encourage relocation out of the protected industries. We argue that the information available to the government, or lack thereof, is a critical factor in understanding these policies. In a world or full information, it makes little sense to use auction quotas rather than tariffs. Similarly, it is unclear why an elaborate program of temporary protection is needed, rather than immediately opening trade and compensating people with an income transfer. When the government has Limited information, however, these policies become quite sensible and may even be optimal.

The monopolistic competition model in international trade predicts three sources of gains from trade that are not present in traditional models: consumer gains from having access to new import varieties of differentiated products; gains from a reduction in firm markups due to import competition; and gains from the self-selection of more efficient firms into export markets, provided that firms are heterogeneous in their productivities. With the added assumption that the distribution of firms’ productivity is Pareto, and with a support that is unbounded above, we argue that only the third source of gains from trade, due to the self-selection of firms, operates. This result helps to explain the simple formula for the gains from trade found by Arkolakis et al. (2012). If the Pareto distribution is bounded above, however, then all three sources of gains from trade operate once again.

https://www.onlinelibrary.wiley.com/doi/pdf/10.1111/1468-0106.12150

Robert C. Feenstra

Papers

Designing Policies to Open Trade

Auctioning U.S. Import Quotas, Foreign Response, and Alternative Policies

Estimating the Benefits of New Products: Some Approximations

Designing Policies to Open Trade

Gains from Trade Under Monopolistic Competition