Novy, Dennis (2010) International trade and monopolistic competition without CES : estimating translog gravity. In: CESifo Area Conference on Global Economy 2010, CESifo Conference Centre, Munich, 19-20 Feb 2010 (Unpublished)

Research output not available from this repository.

Request-a-Copy directly from author or use local Library Get it For Me service.

Request Changes to record.

Abstract

This paper derives a micro-founded gravity equation in general equilibrium based on a translog demand system that allows for endogenous markups and rich substitution patterns across goods. In contrast to standard CES-based gravity equations, trade is more sensitive to trade costs if the exporting country only provides a small share of the destination country‟s imports. As a result, trade costs have a heterogeneous impact across country pairs, with some trade flows predicted to be zero. I test the translog gravity equation and find strong empirical support in its favor. In an application to the currency union effect, I find that a currency union is only associated with substantially higher bilateral trade if the exporting country provides a small share of the destination country‟s imports. For other pairs, the currency union effect is modest or indistinguishable from zero.

Item Type:	Conference Item (Paper)
Subjects:	H Social Sciences > HB Economic Theory
Divisions:	Faculty of Social Sciences > Economics
Official Date:	19 February 2010
Dates:	Date Event 19 February 2010 Completion
Status:	Not Peer Reviewed
Publication Status:	Unpublished
Access rights to Published version:	Open Access (Creative Commons)
Funder:	Economic and Social Research Council (ESRC)
Grant number:	RES-000-22-3112
Version or Related Resource:	Novy, Dennis (2010). International trade and monopolistic competition without CES : estimating gravity with endogenous trade cost elasticities. In: Invited Speaker : Department of Economics. Loughborough Unversity, 24 Feb 2010. Novy, Dennis (2010). International trade and monopolistic competition : estimating gravity with endogenous trade cost elasticities. In: Invited Speaker : International Trade Seminar Series. Department of Economics, University of Oxford, 02 Mar 2010. Novy, Dennis (2010). International trade and monopolistic competition without CES : estimating translog gravity. In: Invited Speaker : Erich-Schneider-Seminar. Department of Economics, University of Kiel, 26 Apr 2010. Novy, Dennis (2010). International trade and monopolistic competition without CES : estimating translog gravity. In: First annual Rocky Mountain Trade Conference. Banff, Canada, 14-16 May 2010. Novy, Dennis (2010). International trade and monopolistic competition without CES : estimating translog gravity. In: National Bureau of Economic Research, Summer Institute 2010 : International Trade and Investment Workshop. Cambridge, Massachusetts, 2-5 Aug 2010. Novy, Dennis (2010). International trade and monopolistic competition without CES : estimating translog gravity. In: The Econometric Society World Congress 2010. Shanghai, China, 17-21 Aug 2010.
Conference Paper Type:	Paper
Title of Event:	CESifo Area Conference on Global Economy 2010
Type of Event:	Conference
Location of Event:	CESifo Conference Centre, Munich
Date(s) of Event:	19-20 Feb 2010
Related URLs:	Other Other Other Other Other

Request changes or add full text files to a record

Repository staff actions (login required)

View Item