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dc.contributor.authorSimonovska, Inaen_US
dc.contributor.authorWaugh, Michaelen_US
dc.date.accessioned2012-06-07en_US
dc.date.accessioned2012-06-12T13:34:10Z-
dc.date.available2012-06-12T13:34:10Z-
dc.date.issued2011en_US
dc.identifier.urihttp://hdl.handle.net/10419/58402-
dc.description.abstractQuantitative 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 new 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. Moreover, robustness exercises result in trade elasticity estimates that are both lower and fall within a narrower range relative to the existing literature. This difference doubles the welfare gains from international trade.en_US
dc.language.isoengen_US
dc.publisherDep. of Economics, Univ. of California Davis, Calif.en_US
dc.relation.ispartofseriesWorking Papers, University of California, Department of Economics 11,2en_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.titleThe elasticity of trade: Estimates and evidenceen_US
dc.typeWorking Paperen_US
dc.identifier.ppn71727988Xen_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:Working Papers, Department of Economics, UC Davis

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