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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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Official URL: http://www2.warwick.ac.uk/fac/soc/economics/resear...
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: |
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| 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| Status: | Not Peer Reviewed | ||||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. |
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| Funder: | Economic and Social Research Council (Great Britain) (ESRC) | ||||
| Grant number: | RES-000-22-3112 (ESRC) | ||||
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