Growth and Trade with Frictions: A Structural Estimation Framework

James Anderson, Mario Larch and Yoto Yotov

No 21377, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We build and estimate a structural dynamic general equilibrium model of growth and trade. Trade affects growth through changes in consumer and producer prices that in turn stimulate or impede physical capital accumulation. At the same time, growth affects trade, directly through changes in country size and indirectly through altering the incidence of trade costs. The model combines structural gravity with a capital accumulation specification of the transition between steady states. Theory translates into an intuitive econometric system that identifies the causal impact of trade on income and growth, and also delivers estimates of the key structural parameters in our model. Counterfactual experiments based on the estimated model give evidence for strong dynamic relationships between growth and trade, resulting in doubling of the static gains from trade liberalization.

JEL-codes: F10 F43 O40 (search for similar items in EconPapers)
Date: 2015-07
New Economics Papers: this item is included in nep-fdg, nep-gro and nep-int
Note: EFG ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (63)

Published as James E Anderson & Mario Larch & Yoto V Yotov, 2020. "Transitional Growth and Trade with Frictions: A Structural Estimation Framework," The Economic Journal, vol 130(630), pages 1583-1607.

Downloads: (external link)
http://www.nber.org/papers/w21377.pdf (application/pdf)

Related works:
Working Paper: Growth and Trade with Frictions: A Structural Estimation Framework (2015)
Working Paper: Growth and Trade with Frictions: A Structural Estimation Framework (2015)
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:nbr:nberwo:21377

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w21377

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().