Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/185464
Authors: 
Pakel, Banu Demir
Javorcik, Beata Smarzynska
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper No. 7266
Abstract: 
Estimates of the trade elasticity based on actual trade policy changes are scarce, and the few that exist are all over the place. This paper offers a setting where an exogenous increase in a border tax can be used to estimate the trade elasticity. It shows theoretically and empirically that if evasion of border taxes is not taken into account, the trade elasticity is estimated with a large downward bias, leading to miscalculation of gains from trade. The paper also contributes to the literature by proposing two new methods of detecting evasion of border taxes.
Subjects: 
trade elasticity
tax evasion
trade financing
border taxes
Benford's law
JEL: 
F10
Document Type: 
Working Paper

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