Using the new products margin to predict the industry-level impact of trade reform

Timothy Kehoe, Jack Rossbach and Kim Ruhl

Journal of International Economics, 2015, vol. 96, issue 2, 289-297

Abstract: This paper develops a methodology for predicting the impact of trade liberalization on exports by industry (3-digit ISIC) based on the pre-liberalization distribution of exports by product (5-digit SITC). We evaluate the ability of our methodology to account for the industry-level variation in export growth by using our model to “predict” the growth in industry trade from the North American Free Trade Agreement (NAFTA). We show that our method performs significantly better than the applied general equilibrium models originally used for the policy evaluation of NAFTA. We find that the most important products in our analysis are not the ones with zero pre-liberalization trade, but those with positive, yet small amounts of pre-liberalization trade.

Keywords: Trade liberalization; Industry; Product (search for similar items in EconPapers)
JEL-codes: F13 F14 F17 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

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Related works:
Working Paper: Using the new products margin to predict the industry-level impact of trade reform (2013)
Working Paper: Using the New Products Margin to Predict the Industry-Level Impact of Trade Reform (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:96:y:2015:i:2:p:289-297

DOI: 10.1016/j.jinteco.2015.03.004

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