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What separates us? Sources of resistance to globalization

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  • Head, Keith
  • Mayer, Thierry

Abstract

With increasing sophistication, economists have been estimating gravity equations for five decades. Robust evidence shows that borders and distance impede trade by much more than tariffs or transports costs can explain. We therefore advocate investigation of other sources of resistance, despite the greater difficulty involved in measuring and modeling them. From our selective review of recent findings, a unifying explanation emerges. A legacy of historical isolation and confl ict forged a world economy in which neither tastes nor information are homogeneously distributed. Cultural difference and inadequate information manifest themselves most strongly at national borders and over distance.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 9614.

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Date of creation: Aug 2013
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Handle: RePEc:cpr:ceprdp:9614

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Keywords: borders; distance; globalization; gravity; history; trade;

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References

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Citations

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Cited by:
  1. Mario J. Crucini & Gregor W. Smith, 2014. "Geographic Barriers to Commodity Price Integration: Evidence from US Cities and Swedish Towns, 1732–1860," NBER Working Papers 20247, National Bureau of Economic Research, Inc.
  2. Agnosteva, Delina E. & Anderson, James E. & Yotov, Yoto, 2014. "Intra‐national Trade Costs: Measurement and Aggregation," School of Economics Working Paper Series 2014-2, LeBow College of Business, Drexel University.
  3. Elizaveta Archanskaia & Guillaume Daudin, 2012. "Heterogeneity and the Distance Puzzle," Working Papers DT/2012/09, DIAL (Développement, Institutions et Mondialisation).
  4. Stephen J. Redding & Matthew A. Turner, 2014. "Transportation Costs and the Spatial Organization of Economic Activity," NBER Working Papers 20235, National Bureau of Economic Research, Inc.
  5. Kunal Dasgupta & Jordi Mondria, 2014. "Inattentive Importers," Working Papers tecipa-512, University of Toronto, Department of Economics.

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