The Elasticity of Trade: Estimates and Evidence /
Simonovska, Ina.
The Elasticity of Trade: Estimates and Evidence / Ina Simonovska, Michael E. Waugh. - Cambridge, Mass. National Bureau of Economic Research 2011. - 1 online resource: illustrations (black and white); - NBER working paper series no. w16796 . - Working Paper Series (National Bureau of Economic Research) no. w16796. .
February 2011.
Quantitative results from a large class of structural gravity models of international trade depend critically on the elasticity of trade with respect to trade frictions. We develop a new simulated method of moments estimator to estimate this elasticity from disaggregate price and trade-flow data and we use it within Eaton and Kortum's (2002) Ricardian model. We apply our estimator to disaggregate price and trade-flow data for 123 countries in the year 2004. Our method yields a trade elasticity of roughly four, nearly fifty percent lower than Eaton and Kortum's (2002) approach. This difference doubles the welfare gains from international trade.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.
The Elasticity of Trade: Estimates and Evidence / Ina Simonovska, Michael E. Waugh. - Cambridge, Mass. National Bureau of Economic Research 2011. - 1 online resource: illustrations (black and white); - NBER working paper series no. w16796 . - Working Paper Series (National Bureau of Economic Research) no. w16796. .
February 2011.
Quantitative results from a large class of structural gravity models of international trade depend critically on the elasticity of trade with respect to trade frictions. We develop a new simulated method of moments estimator to estimate this elasticity from disaggregate price and trade-flow data and we use it within Eaton and Kortum's (2002) Ricardian model. We apply our estimator to disaggregate price and trade-flow data for 123 countries in the year 2004. Our method yields a trade elasticity of roughly four, nearly fifty percent lower than Eaton and Kortum's (2002) approach. This difference doubles the welfare gains from international trade.
System requirements: Adobe [Acrobat] Reader required for PDF files.
Mode of access: World Wide Web.