Bilateral Trade Imbalances

Robert Zymek

No 1117, 2018 Meeting Papers from Society for Economic Dynamics

Abstract: In standard quantitative models, bilateral trade imbalances are determined by aggregate trade imbalances, expenditure and production patterns, and trade wedges. We calibrate such a model using recent data on incomes, factor endowments, and sector-level expenditures, outputs and bilateral trade flows for 40 economies and the rest of the world. Large pairwise asymmetries in trade wedges are needed for the model’s bilateral-trade predictions to match the data. They account for 21-35% of the standard deviation of bilateral trade imbalances. Aggregate imbalances play a minor role, while more than 50% of the variation is explained by international differences in production and expenditure patterns.

Date: 2018
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Bilateral Trade Imbalances (2024)
Working Paper: Bilateral Trade Imbalances (2022)
Working Paper: Bilateral Trade Imbalances (2019)
Working Paper: Bilateral Trade Imbalances (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed018:1117

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