EconPapers    
Economics at your fingertips  
 

A Passage to India: Quantifying Internal and External Barriers to Trade

Eva Van Leemput ()

No 1185, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: This paper quantifies the size of internal versus external trade barriers and assesses the impact on trade and welfare. I develop a quantitative multi-sector international trade model featuring nonhomothetic preferences in which states trade both domestically and internationally. I discipline the model using rich micro data on price dispersion as well as foreign and domestic trade flows at the Indian state level. I find that (1) state-based price data predict internal trade flows well; (2) internal trade barriers make up 40% of the total trade cost on average, but vary substantially by state depending on the distance to the closest port; and (3) the welfare impacts of domestic integration are substantial: reducing trade barriers across states to the U.S. level increases welfare by more (13%) than fully eliminating international import barriers (7%).

Keywords: Internal Trade Barriers; External Trade Barriers; Welfare; India (search for similar items in EconPapers)
JEL-codes: F13 F14 O18 O24 (search for similar items in EconPapers)
Pages: 65 pages
Date: 2016-12
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
https://www.federalreserve.gov/econresdata/ifdp/2016/files/ifdp1185.pdf (application/pdf)

Related works:
Journal Article: A passage to India: Quantifying internal and external barriers to trade (2021) Downloads
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:fip:fedgif:1185

DOI: 10.17016/IFDP.2016.1185

Access Statistics for this paper

More papers in International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.) Contact information at EDIRC.
Bibliographic data for series maintained by Ryan Wolfslayer ; Keisha Fournillier ().

 
Page updated 2024-07-17
Handle: RePEc:fip:fedgif:1185