Estimating the welfare costs of autarky: a sufficient statistics approach

Federico Esposito

MPRA Paper from University Library of Munich, Germany

Abstract: This paper uses the Jeffersonian Embargo enacted in 1807 to estimate the welfare costs of autarky. I use an Armington trade model to compute the welfare losses using two sufficient statistics: the share of expenditures on domestic goods and the elasticity of substitution between domestic and imported goods. I use historical data from 1792 to 1807 to estimate the Armington elasticity, using import tariffs as instrument for relative prices. The empirical findings suggest welfare losses of 2.83-8.14% of real income.

Keywords: Autarky; welfare gains from trade; Jeffersonian Embargo; Armington elasticity (search for similar items in EconPapers)
JEL-codes: F00 N0 N00 N7 N71 (search for similar items in EconPapers)
Date: 2020-03-01
New Economics Papers: this item is included in nep-his, nep-int and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Journal Article: Estimating the welfare costs of autarky: A sufficient statistics approach (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:100120

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