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EU Enlargement and the New Goods Margin in Austrian Trade: Comment

Ignacio Rosal ()
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Ignacio Rosal: University of Oviedo

Open Economies Review, 2017, vol. 28, issue 4, 795-803

Abstract: Abstract This paper comments on the article ‘EU Enlargement and the New Goods Margin in Austrian Trade’ by John T. Dalton (Open Econ Rev 28(1):61–78, 2017). Dalton measures the new goods margin of trade between Austria and the new entrants to the EU in 2004, following the methodology proposed by Timothy Kehoe and Kim Ruhl (J Polit Econ 121(2):358–392, 2013). The present paper argues that the author overlooked the implicit requirement of using a consistent product classification, leading to overestimation of the new goods margin. After replicating Dalton’s results and recalculating the trade share of the new goods margin using a consistent product classification, this paper shows the magnitude of the overestimation (up to 20 or 30 decimal points of the trade share).

Keywords: Extensive margin; International trade; Trade liberalization; Austria; EU; Product classification; F10; F13; F14; F15 (search for similar items in EconPapers)
Date: 2017
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