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Welfare gains through globalization: Evidence from Japan's manufacturing sector

Author

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  • Aoyagi, Takahide
  • Ito, Tadashi
  • Matsuura, Toshiyuki

Abstract

Welfare gains achieved through international trade are a cornerstone of the literature on international economics. However, the data and research methods needed to empirically assess these welfare gains have only recently become available. Building on recently developed methodologies for estimating the elasticity of substitution and computing welfare gains from trade, we estimate Japan's welfare gains from liberalizing trade in the manufacturing sector. To do so, we estimate the elasticities of substitution using Japanese customs data at Harmonized System (HS) 9-digit product codes. The analysis shows that Japan's welfare gains from trade liberalization occurred especially from the end of the 1990s onward, and reached 16 percent vis-à-vis the autarky situation.

Suggested Citation

  • Aoyagi, Takahide & Ito, Tadashi & Matsuura, Toshiyuki, 2022. "Welfare gains through globalization: Evidence from Japan's manufacturing sector," Journal of the Japanese and International Economies, Elsevier, vol. 64(C).
    • Handle: RePEc:eee:jjieco:v:64:y:2022:i:c:s088915832200003x
    DOI: 10.1016/j.jjie.2022.101193
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    References listed on IDEAS

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    More about this item

    Keywords

    Trade liberalization; Welfare gains; Japan;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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