Can Comparative Advantage Explain the Growth of US Trade?

Marco Maffezzoli () and Cuñat, Alejandro
Authors registered in the RePEc Author Service: Alejandro Cunat

No 5348, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We present a dynamic comparative advantage model in which moderate reductions in import tariffs can generate sizable increases in trade volumes over time. A fall in import tariffs has two effects on the volume of trade. First, for given factor endowments, it raises the degree of specialization of countries, leading to a larger volume of trade in the short run. Second, it raises the factor price of each country's abundant production factor, leading to diverging paths of relative factor endowments across countries and a rising degree of specialization. A simulation exercise shows that a fall in import tariffs over time produces a disproportional increase in the trade share of output as in the data. Even when elasticities of substitution are not particularly high, moderate reductions in trade barriers lead to large trade volumes over time.

Keywords: International trade; Heckscher-ohlin (search for similar items in EconPapers)
JEL-codes: F1 F4 (search for similar items in EconPapers)
Date: 2005-11
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://cepr.org/publications/DP5348 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Journal Article: Can Comparative Advantage Explain the Growth of us Trade? (2007)
Working Paper: Can Comparative Advantage Explain the Growth of US Trade? (2005)
Working Paper: Can comparative advantage explain the growth of US trade? (2005)
Working Paper: Can Comparative Advantage Explain the Growth of US Trade? (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:5348

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP5348

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().