Estimates of the Trade and Welfare Effects of NAFTA
Lorenzo Caliendo,Fernando Parro +1 more
TLDR
The authors decompose the effects of NAFTA and find that 93% of Mexico's, 58% of Canada's and 55% of the United States' trade effects can be attributed to NAFTA's tariff reductions.Abstract:
We build into a Ricardian model the role of trade in intermediate inputs, sectoral linkages and differing productivity levels across sectors. We also propose a method to estimate sectoral trade elasticities. In our model, the trade effects due to overall tariff reductions account for most of the observed changes in trade flows for NAFTA members. We decompose the effects of NAFTA and find that 93% of Mexico’s, 58% of Canada’s and 55% of the United States’ trade effects can be attributed to NAFTA’s tariff reductions. Trade in intermediate inputs and input-output linkages can amplify the welfare effects of tariff reductions.read more
Citations
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Book ChapterDOI
Gravity Equations: Workhorse,Toolkit, and Cookbook
TL;DR: In this article, the estimation and interpretation of gravity equations for bilateral trade is discussed, and several theory-consistent estimation methods are presented. But the authors argue against sole reliance on any one method and instead advocate a toolkit approach.
Journal ArticleDOI
New Trade Models, Same Old Gains?
TL;DR: In this paper, the authors investigate to what extent answers to new micro-level questions have affected answers to an old and central question in the field: how large are the welfare gains from trade?
Posted Content
Robots and Jobs: Evidence from US Labor Markets
Daron Acemoglu,Pascual Restrepo +1 more
TL;DR: In this paper, the authors analyzed the effect of the increase in industrial robot usage between 1990 and 2007 on US local labor markets, and showed that robots may reduce employment and wages, and that the local labor market effects of robots can be estimated by regressing the change in employment and wage on the exposure to robots in each local labour market, defined from the national penetration of robots into each industry and the local distribution of employment across industries.
ReportDOI
Trade Theory with Numbers: Quantifying the Consequences of Globalization
TL;DR: In this article, the authors review a recent body of theoretical work that aims to put numbers on the consequences of globalization and highlight how various economic considerations, such as market structure, firm-level heterogeneity, multiple sectors, intermediate goods, and multiple factors of production, affect the magnitude of gains from trade liberalization.
Posted Content
Populism and the Economics of Globalization
TL;DR: The authors argue that economic history and economic theory both provide ample grounds for anticipating that advanced stages of economic globalization would produce a political backlash, and distinguish between left-wing and right-wing variants of populism, which differ with respect to societal cleavages that populist politicians highlight.
References
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Journal ArticleDOI
The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity
TL;DR: This paper developed a dynamic industry model with heterogeneous firms to analyze the intra-industry effects of international trade and showed how the exposure to trade will induce only the more productive firms to enter the export market (while some less productive firms continue to produce only for the domestic market).
Journal ArticleDOI
Increasing Returns and Economic Geography
TL;DR: This paper developed a simple model that shows how a country can endogenously become differentiated into an industrialized core and an agricultural periphery, in which manufacturing firms tend to locate in the region with larger demand, but the location of demand itself depends on the distribution of manufacturing.
Journal ArticleDOI
Monopolistic competition and optimum product diversity
Avinash Dixit,Joseph E. Stiglitz +1 more
TL;DR: In this article, Pettengill tests whether there is an excessive number of firms in a monopolistically competitive equilibrium by a device of considerable expository merit, and redistributes the resources thus released equally over the remaining firms in the sector, to see if welfare can be improved.
Posted Content
Gravity with Gravitas: A Solution to the Border Puzzle
TL;DR: This article showed that the gravity model usually estimated does not correspond to the theory behind it and showed that national borders reduce trade between the US and Canada by about 44% while reducing trade among other industrialized countries by about 30%.
Journal ArticleDOI
A Theory of Demand for Products Distinguished by Place of Production (Une théorie de la demande de produits différenciés d'après leur origine) (Una teorÃa de la demanda de productos distinguiéndolos según el lugar de producción)
TL;DR: In this article, Solow et al. present an approach for the analysis of the variation of a flux commercial particulier entre pays in the context of recherche.