The Composition of Trade Flows and the Aggregate Effects of Trade Barriers

Scott French

No 2015-24, Discussion Papers from School of Economics, The University of New South Wales

Abstract: A widely used class of quantitative trade models implicitly assumes that patterns of comparative advantage take a specific form such that they have no influence over the effect of trade barriers on aggregate trade flows and welfare. In this paper, I relax this assumption, developing a framework in which to analyze the role of interactions among countries' patterns of comparative advantage in determining the aggregate effects of trade barriers. My model preserves much of the tractability of standard aggregate quantitative trade models while allowing for the effects of any pattern of comparative advantage, across many products and countries, to be taken into account. After fitting my model to product-level trade data, I find that the composition of trade flows is quantitatively important in determining the welfare gains from trade and the aggregate effects of trade barriers. A key finding is that the welfare gains from trade tend to be larger and more skewed in favor of low-income countries than an aggregate model would suggest.

Keywords: international trade; welfare; composition; product level; comparative advantage; trade barriers; gravity; trade cost elasticity; developing countries (search for similar items in EconPapers)
JEL-codes: F11 F14 F17 F62 O19 (search for similar items in EconPapers)
Pages: 56 pages
Date: 2015-10
New Economics Papers: this item is included in nep-agr and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://research.economics.unsw.edu.au/RePEc/papers/2015-24.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 503 Service Unavailable: Back-end server is at capacity

Related works:
Journal Article: The composition of trade flows and the aggregate effects of trade barriers (2016)
Working Paper: The Composition of Trade Flows and the Aggregate Effects of Trade Barriers (2014)
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:swe:wpaper:2015-24

Access Statistics for this paper

More papers in Discussion Papers from School of Economics, The University of New South Wales Contact information at EDIRC.
Bibliographic data for series maintained by Hongyi Li ().