Trade Theory with Numbers: Quantifying the Consequences of Globalization

Arnaud Costinot and Andres Rodriguez-Clare

No 18896, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We review a recent body of theoretical work that aims to put numbers on the consequences of globalization. A unifying theme of our survey is methodological. We rely on gravity models and demonstrate how they can be used for counterfactual analysis. We highlight how various economic considerations--market structure, firm-level heterogeneity, multiple sectors, intermediate goods, and multiple factors of production--affect the magnitude of the gains from trade liberalization. We conclude by discussing a number of outstanding issues in the literature as well as alternative approaches for quantifying the consequences of globalization.

JEL-codes: F11 F12 F13 F15 F17 F60 F62 (search for similar items in EconPapers)
Date: 2013-03
New Economics Papers: this item is included in nep-int
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Published as Handbook of International Economics Volume 4, 2014, Pages 197–261 Handbook of International Economics Cover image Chapter 4 – Trade Theory with Numbers: Quantifying the Consequences of Globalization * Arnaud Costinota, b, Andrés Rodríguez-Clareb, c

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Chapter: Trade Theory with Numbers: Quantifying the Consequences of Globalization (2014)
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