Working paper
Growth and Trade with Frictions [electronic resource]: A Structural Estimation Framework
2015
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.
Metrics
8 Record Views
Details
- Title
- Growth and Trade with Frictions [electronic resource]: A Structural Estimation Framework
- Creators
- James E AndersonMario LarchYoto V YotovNational Bureau of Economic Research
- Series
- NBER working paper series
- Publisher
- Cambridge, Mass. National Bureau of Economic Research 2015
- Resource Type
- Working paper
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Other Identifier
- 991021807006804721