Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/46314 
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dc.contributor.authorSimonovska, Inaen
dc.contributor.authorWaugh, Michael E.en
dc.date.accessioned2011-05-23-
dc.date.accessioned2011-06-29T11:15:19Z-
dc.date.available2011-06-29T11:15:19Z-
dc.date.issued2011-
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
dc.language.isoengen
dc.publisher|aCenter for Economic Studies and ifo Institute (CESifo) |cMunichen
dc.relation.ispartofseries|aCESifo Working Paper |x3356en
dc.subject.jelF10en
dc.subject.jelF11en
dc.subject.jelF14en
dc.subject.jelF17en
dc.subject.ddc330en
dc.subject.keywordelasticity of tradeen
dc.subject.keywordbilateralen
dc.subject.keywordgravityen
dc.subject.keywordprice dispersionen
dc.subject.keywordindirect inferenceen
dc.subject.stwAußenwirtschaften
dc.subject.stwAußenhandelsbeschränkungen
dc.subject.stwElastizitäten
dc.subject.stwAußenhandelsliberalisierungen
dc.subject.stwWohlfahrtseffekten
dc.subject.stwWelten
dc.titleThe elasticity of trade: Estimates and evidence-
dc.typeWorking Paperen
dc.identifier.ppn659462915en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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