Welfare gains through globalization: Evidence from Japan's manufacturing sector

Takahide Aoyagi, Tadashi Ito and Toshiyuki Matsuura

No e158, Working Papers from Tokyo Center for Economic Research

Abstract: Welfare gains achieved through international trade are a cornerstone of the literature on international economics. However, the data and research methods needed to empirically assess these welfare gains have only recently become available. Building on recently developed methodologies for estimating the elasticity of substitution and computing welfare gains from trade, we estimate Japan's welfare gains from liberalizing trade in the manufacturing sector. To do so, we estimate the elasticities of substitution using Harmonized System (HS) 9-digit product codes, for various periods of time. The analysis shows that Japan's welfare gains from trade liberalization occurred especially from the 1990s onward, and reached eleven percent vis-a-vis the autarky situation.

Pages: 18 pages
Date: 2021-03
New Economics Papers: this item is included in nep-his and nep-int
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