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Gravity redux : measuring international trade costs with panel data

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Novy, Dennis. (2012) Gravity redux : measuring international trade costs with panel data. Economic Inquiry, Vol.51 (No.1). pp. 101-121. ISSN 0095-2583

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Abstract

Barriers to international trade are known to be large but because of 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 between 1970 and 2000, with Mexico and Canada experiencing the biggest reductions.

Item Type: Journal Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics
Journal or Publication Title: Economic Inquiry
Publisher: Wiley-Blackwell Publishing, Inc.
ISSN: 0095-2583
Date: 2012
Volume: Vol.51
Number: No.1
Page Range: pp. 101-121
Identification Number: 10.1111/j.1465-7295.2011.00439.x
Status: Peer Reviewed
Publication Status: Published
Access rights to Published version: Restricted or Subscription Access
Funder: Economic and Social Research Council
Grant number: RES-000-22-3112
Version or Related Resource: Novy, D. (2009). Gravity redux: measuring international trade costs with panel data. [Coventry] : University of Warwick, Economics Department. (Warwick economic research papers, no.861).
Related URLs:
URI: http://wrap.warwick.ac.uk/id/eprint/44755

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