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Gravity redux: measuring international trade costs with panel data

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Novy, Dennis (2009) Gravity redux: measuring international trade costs with panel data. Working Paper. Coventry: University of Warwick, Department of Economics. Warwick economic research papers (No.861).

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Abstract

Barriers to international trade are known to be large. But have they become smaller over time? Building on the gravity framework by Anderson and van Wincoop (2003), I derive an analytical solution for time-varying multilateral resistance variables that can be related to observable trade data. This solution makes it possible to infer time-varying bilateral trade costs directly from the model.s gravity equation without imposing arbitrary trade cost functions. As an illustration, 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.

Item Type: Working or Discussion Paper (Working Paper)
Subjects: H Social Sciences > HF Commerce
Divisions: Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH): International trade, Panel analysis, Costs, Industrial, United States -- Foreign economic relations -- Mexico, Mexico -- Foreign economic relations -- United States
Series Name: Warwick economic research papers
Publisher: University of Warwick, Department of Economics
Place of Publication: Coventry
Official Date: July 2009
Dates:
DateEvent
July 2009["eprint_fieldopt_dates_date_type_modified" not defined]
Number: No.861
Number of Pages: 27
Institution: University of Warwick
Status: Not Peer Reviewed
Access rights to Published version: Open Access
Description:

Originally published November 2008, this version updated July 2009.
Funder: Economic and Social Research Council (Great Britain) (ESRC)
Grant number: RES-000-22-3112 (ESRC)
Related URLs:
References:

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URI: http://wrap.warwick.ac.uk/id/eprint/1355

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