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Testing Trade Theory

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  • Edward E. Leamer

Abstract

This review of the empirical literature in international micro economics observes that data have had a disappointingly small effect on the intellectual lives of international economists. The reasons for this are many and diverse, but one general comment is made here: We need better balance between the three layers of the argument: the issues, the theory and the data. The profession as a whole is imbalanced in favor of theory. But most of the empirical work is also imbalanced. Some empirical studies take the theory too seriously and lose track of the issues. Others do not take the theory seriously enough and try to make do with ad hoc but inappropriate empirical models. Some of these which lack the theory layer lack as well any clear issues. We need better balance.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3957.

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Date of creation: Jan 1992
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Publication status: published as Surveys in International Trade, ed. by David Greenaway and L. Alan Winters, Basil Blackwell Publishers, 1994. pp. 66-106.
Handle: RePEc:nbr:nberwo:3957

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  1. Miller, Marcus H & Spencer, John E, 1977. "The Static Economic Effects of the UK Joining the EEC: A General Equilibrium Approach," Review of Economic Studies, Wiley Blackwell, vol. 44(1), pages 71-93, February.
  2. Robin W. Boadway & John M. Treddenick, 1978. "A General Equilibrium Computation of the Effects of the Canadian Tariff Structure," Canadian Journal of Economics, Canadian Economics Association, vol. 11(3), pages 424-46, August.
  3. Charles L. Ballard & Don Fullerton & John B. Shoven & John Whalley, 1985. "General Equilibrium Analysis of Tax Policies," NBER Chapters, in: A General Equilibrium Model for Tax Policy Evaluation, pages 6-24 National Bureau of Economic Research, Inc.
  4. Deardorff, Alan V. & Stern, Robert M., 1981. "A disaggregated model of world production and trade: An estimate of the impact of the Tokyo Round," Journal of Policy Modeling, Elsevier, vol. 3(2), pages 127-152, May.
  5. Aitken, Norman D, 1973. "The Effect of the EEC and EFTA on European Trade: A Temporal Cross-Section Analysis," American Economic Review, American Economic Association, vol. 63(5), pages 881-92, December.
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