Novy, Dennis (2012) International trade without CES : estimating translog gravity. Working Paper. Coventry, UK: Department of Economics, University of Warwick. CAGE Online Working Paper Series, Volume 2012 (Number 101).

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Abstract

This paper derives a micro-founded gravity equation based on a translog demand system that
allows for flexible substitution patterns across goods. In contrast to the standard CES-based
gravity equation, translog gravity generates an endogenous trade cost elasticity. 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 empirical
evidence that is in many ways consistent with its predictions.

Item Type:	Working or Discussion Paper (Working Paper)
Subjects:	H Social Sciences > HB Economic Theory H Social Sciences > HF Commerce
Divisions:	Faculty of Social Sciences > Economics
Library of Congress Subject Headings (LCSH):	International trade -- Econometric models, Production functions (Economic theory), Monopolistic competition, Imports, Exports
Series Name:	CAGE Online Working Paper Series
Publisher:	Department of Economics, University of Warwick
Place of Publication:	Coventry, UK
Official Date:	August 2012
Dates:	Date Event August 2012 Published
Volume:	Volume 2012
Number:	Number 101
Number of Pages:	37
Institution:	University of Warwick
Status:	Not Peer Reviewed
Publication Status:	Published
Access rights to Published version:	Open Access (Creative Commons)
Date of first compliant deposit:	1 August 2016
Date of first compliant Open Access:	1 August 2016
Funder:	Economic and Social Research Council (Great Britain) (ESRC)
Grant number:	RES-000-22-3112 (ESRC)
Version or Related Resource:	Novy, D. (2010). International trade without CES : estimating translog gravity. Working Paper. Coventry: Department of Economics, University of Warwick. (CAGE Online Working Paper Series, No.31). http://wrap.warwick.ac.uk/id/eprint/57575 Novy, D. (2010). International trade and monopolistic competition without CES : estimating translog gravity. Coventry: Department of Economics, University of Warwick. (The Warwick Economics Research Paper Series no. 929). http://wrap.warwick.ac.uk/id/eprint/3531 Novy, Dennis. (2013) International trade without CES : estimating translog gravity. Journal of International Economics, 89 (2). pp. 271-282. ISSN 0022-1996 http://wrap.warwick.ac.uk/id/eprint/50192 Novy, Dennis (2011). International trade and monopolistic competition without CES : estimating translog gravity. Invited Speaker : Why Open Regionalism Is Not Always Good. The Leverhulme Centre for Research on Globalisation and Economic Policy, University of Nottingham, 31 Jan 2011. http://wrap.warwick.ac.uk/id/eprint/44990
Related URLs:	Related item in WRAP Related item in WRAP Related item in WRAP Related item in WRAP

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• International trade and monopolistic competition without CES : estimating translog gravity. (deposited 15 Nov 2010 14:41)
  • International trade without CES : estimating translog gravity. (deposited 30 Oct 2013 17:30)
    • International trade without CES : estimating translog gravity. (deposited 18 Nov 2013 12:15) [Currently Displayed]

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