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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/52476
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| Title: | | Gravity redux: Measuring international trade costs with panel data  |
| Authors: | | Novy, Dennis |
| Issue Date: | | 2011 |
| Series/Report no.: | | CESifo working paper: Trade Policy 3616 |
| 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. |
| Subjects: | | trade costs gravity multilateral resistance Ricardian trade heterogeneous firms |
| JEL: | | F10 F15 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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