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Gravity Redux: Measuring International Trade Costs with Panel Data
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This paper derived a micro-founded measure of bilateral trade costs that indirectly infers trade frictions from observable trade data and showed that this trade cost measure is consistent with a broad range of leading trade theories including Ricardian and heterogeneous firms models.Abstract:
Barriers to international trade are known to be large but due to data limitations it is hard to measure them directly for a large number of countries over many years. To address this problem I derive a micro-founded measure of bilateral trade costs that indirectly infers trade frictions from observable trade data. I show that this trade cost measure is consistent with a broad range of leading trade theories including Ricardian and heterogeneous firms models. In an application I show that U.S. trade costs with major trading partners declined on average by about 40 percent between 1970 and 2000, with Mexico and Canada experiencing the biggest reductions.read more
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BookDOI
An Advanced Guide to Trade Policy Analysis: The Structural Gravity Model
TL;DR: The Advanced Guide to Trade Policy Analysis as mentioned in this paper is a complementary follow-up to the original Practical Guide to trade policy analysis and provides the most recent tools for analysis of trade policy using structural gravity models.
Posted Content
Trade Booms, Trade Busts and Trade Costs
TL;DR: In this paper, the authors derive a micro-founded measure of trade frictions from leading trade theories and use it to gauge the importance of bilateral trade costs in determining international trade flows.
Journal ArticleDOI
The costs and benefits of leaving the EU: trade effects
Swati Dhingra,Hanwei Huang,Gianmarco I.P. Ottaviano,João Paulo Pessoa,Thomas Sampson,John Van Reenen +5 more
TL;DR: In this paper, the welfare effects of Brexit, focusing on trade and fiscal transfers, have been investigated using a standard quantitative general equilibrium trade model with many countries and sectors and trade in intermediates.
Journal ArticleDOI
The Extensive Margin of Exporting Products: A Firm-Level Analysis
Costas Arkolakis,Costas Arkolakis,Costas Arkolakis,Marc-Andreas Muendler,Marc-Andreas Muendler +4 more
TL;DR: In this paper, the authors use a panel of Brazilian exporters, their products, and destination markets to document a set of regularities for multi-product exporters: (i) few top-selling products account for the bulk of a firm's exports in a market, (ii) the distribution of exporter scope (the number of products per firm per market) is similar across markets, and (iii) within each market, exporterScope is positively associated with average sales per product.
Book ChapterDOI
The Gravity Model in International Trade
TL;DR: In this article, the authors show how some of the issues raised by Jan Tinbergen have been the step stones of a 50-year long research agenda, and how the numerous empirical and theoretical contributions that followed dealt with old problems and highlighted new ones.
References
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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%.
Posted Content
The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity
TL;DR: In this paper, a dynamic industry model with heterogeneous firms is proposed to explain why international trade induces reallocations of resources among firms in an industry and contributes to a welfare gain.
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Scale Economies, Product Differentiation, and the Pattern of Trade
TL;DR: In this article, the authors present a simple formal analysis which incorporates these elements, and show how it can be used to shed some light on some issues which cannot be handled in more conventional models.
Journal ArticleDOI
Export Versus FDI with Heterogeneous Firms
Elhanan Helpman,Elhanan Helpman,Elhanan Helpman,Marc J. Melitz,Marc J. Melitz,Marc J. Melitz,Stephen R. Yeaple +6 more
TL;DR: In this article, Helpman et al. introduce a simple multicountry, multisector model, in which firms face a proximity-concentration trade-off between exports and FDI.
Journal ArticleDOI
Technology, Geography, and Trade
Jonathan Eaton,Samuel Kortum +1 more
TL;DR: This article developed a Ricardian trade model that incorporates realistic geographic features into general equilibrium and delivered simple structural equations for bilateral trade with parameters relating to absolute advantage, comparative advantage, and geographic barriers.