Gravity redux : measuring international trade costs with panel data
Novy, Dennis (2008) Gravity redux : measuring international trade costs with panel data. In: The Changing Global Economy Conference, Department of Economic, University of Western Ontario, 25 Apr 2008 (Unpublished)Full text not available from this repository.
Official URL: http://economics.uwo.ca/conference/thechangingglob...
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 and observable multilateral resistance variables. This solution gives rise to a micro-founded gravity equation from which bilateral trade costs can be directly inferred. This approach is easy to implement and obviates the need to impose 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:||Conference Item (Paper)|
|Subjects:||H Social Sciences > HB Economic Theory|
|Divisions:||Faculty of Social Sciences > Economics|
|Official Date:||25 April 2008|
|Status:||Not Peer Reviewed|
|Conference Paper Type:||Paper|
|Title of Event:||The Changing Global Economy Conference|
|Type of Event:||Conference|
|Location of Event:||Department of Economic, University of Western Ontario|
|Date(s) of Event:||25 Apr 2008|
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