Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/46314
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dc.contributor.authorSimonovska, Inaen_US
dc.contributor.authorWaugh, Michael E.en_US
dc.date.accessioned2011-05-23en_US
dc.date.accessioned2011-06-29T11:15:19Z-
dc.date.available2011-06-29T11:15:19Z-
dc.date.issued2011en_US
dc.identifier.urihttp://hdl.handle.net/10419/46314-
dc.description.abstractQuantitative results from a large class of international trade models depend critically on the elasticity of trade with respect to trade frictions. We develop a simulated method of moments estimator to estimate this elasticity from disaggregate price and trade-flow data using the Ricardian model. We motivate our estimator by proving that the estimator developed in Eaton and Kortum (2002) is biased in any finite sample. We quantitatively show that the bias is severe and that the data requirements necessary to eliminate it in practice are extreme. Applying our estimator to new disaggregate price and trade-flow data for 123 countries in the year 2004 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.en_US
dc.language.isoengen_US
dc.publisher|aCenter for Economic Studies and Ifo Institute (CESifo) |cMunichen_US
dc.relation.ispartofseries|aCESifo working paper: Trade Policy |x3356en_US
dc.subject.jelF10en_US
dc.subject.jelF11en_US
dc.subject.jelF14en_US
dc.subject.jelF17en_US
dc.subject.ddc330en_US
dc.subject.keywordelasticity of tradeen_US
dc.subject.keywordbilateralen_US
dc.subject.keywordgravityen_US
dc.subject.keywordprice dispersionen_US
dc.subject.keywordindirect inferenceen_US
dc.subject.stwAußenwirtschaften_US
dc.subject.stwAußenhandelsbeschränkungen_US
dc.subject.stwElastizitäten_US
dc.subject.stwAußenhandelsliberalisierungen_US
dc.subject.stwWohlfahrtseffekten_US
dc.subject.stwWelten_US
dc.titleThe elasticity of trade: Estimates and evidenceen_US
dc.typeWorking Paperen_US
dc.identifier.ppn659462915en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US

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