IDEAS home Printed from https://ideas.repec.org/p/apk/doctra/1602.html

Gains from Trade: the Costa Rican Case

Author

Listed:
  • Alonso Alfaro-Ureña

    (Economic Division, Central Bank of Costa Rica)

Abstract

One of the oldest and most interesting questions in the economic literature is how to quantify the gains from trade. Recently, Costinot & Rodrguez-Clare (2013) (CRC) developed a methodology that uses the World Input Output Database (WIOD) to compute this value for a list of countries. Costa Rica has never been part of this database given the lack of appropriate data. However, with the publication of a new Input Output Table for Costa Rica, the Foreign Trade Ministry (COMEX) was able to develop a domestic version of the WIOD that includes the country. This allows for counterfactual exercises in which we compare the current situation with autarky and other average tariff levels. As CRC show, this can be done using different productive structures and competition schemes in the economy. The results can provide valuable information on how much a small open economy like Costa Rica's can benefit from international trade, and what are the differences in the results when compared to similar countries. ***Resumen: Uno de los retos más interesantes de la literatura económica es la cuantificación de las ganancias del Comercio. Recientemente, Costinot & Rodríguez-Clare (2013) (CRC) desarrollaron una metodología que utiliza la World Input Output Database (WIOD) para calcular este valor para una lista de países. Costa Rica nunca ha sido parte de esta base de datos debido a que no contaba con los datos apropiados. Sin embargo, la publicación de la nueva Matriz Insumo Producto para Costa Rica permitió al Ministerio de Comercio Exterior (COMEX) desarrollar una versión de la WIOD que incluye al país. Esto permite realizar ejercicios contrafactuales en los que se compara la situación vigente con autarquía y otros niveles de tarifas promedio. Como CRC muestran, esto se puede hacer considerando diferentes estructuras productivas y esquemas de competencia. Los resultados pueden constituir información valiosa sobre cuánto puede ganar una economía pequeña y abierta como la costarricense gracias al comercio internacional, y en qué se diferencia de otros países en una situación similar.

Suggested Citation

  • Alonso Alfaro-Ureña, 2019. "Gains from Trade: the Costa Rican Case," Documentos de Trabajo 1602, Banco Central de Costa Rica.
    • Handle: RePEc:apk:doctra:1602
    as

    Download full text from publisher

    File URL: https://repositorioinvestigaciones.bccr.fi.cr/handle/20.500.12506/279
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," American Economic Review, American Economic Association, vol. 98(4), pages 1707-1721, September.
    2. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    3. Jonathan Eaton & Samuel Kortum & Francis Kramarz, 2011. "An Anatomy of International Trade: Evidence From French Firms," Econometrica, Econometric Society, vol. 79(5), pages 1453-1498, September.
    4. Costas Arkolakis, 2010. "Market Penetration Costs and the New Consumers Margin in International Trade," Journal of Political Economy, University of Chicago Press, vol. 118(6), pages 1151-1199.
    5. Balistreri, Edward J. & Hillberry, Russell H. & Rutherford, Thomas F., 2011. "Structural estimation and solution of international trade models with heterogeneous firms," Journal of International Economics, Elsevier, vol. 83(2), pages 95-108, March.
    6. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-959, December.
    7. Costas Arkolakis & Arnaud Costinot & Andres Rodriguez-Clare, 2012. "New Trade Models, Same Old Gains?," American Economic Review, American Economic Association, vol. 102(1), pages 94-130, February.
    8. Thomas Chaney, 2008. "Distorted Gravity: The Intensive and Extensive Margins of International Trade," SciencePo Working papers hal-03579844, HAL.
    9. repec:spo:wpmain:info:hdl:2441/6apm7lruv088iagm4rv2c33jtg is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jeffrey H. Bergstrand & Stephen R. Cray & Antoine Gervais, 2023. "Increasing Marginal Costs, Firm Heterogeneity,and the Gains from "Deep" International Trade Agreements," Cahiers de recherche 23-01, Departement d'économique de l'École de gestion à l'Université de Sherbrooke.
    2. Costinot, Arnaud & Rodríguez-Clare, Andrés, 2014. "Trade Theory with Numbers: Quantifying the Consequences of Globalization," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 197-261, Elsevier.
    3. Felbermayr, Gabriel & Jung, Benjamin & Larch, Mario, 2015. "The welfare consequences of import tariffs: A quantitative perspective," Journal of International Economics, Elsevier, vol. 97(2), pages 295-309.
    4. Bergstrand, Jeffrey H. & Cray, Stephen R. & Gervais, Antoine, 2023. "Increasing marginal costs, firm heterogeneity, and the gains from “deep” international trade agreements," Journal of International Economics, Elsevier, vol. 144(C).
    5. Melitz, Marc J. & Redding, Stephen J., 2014. "Heterogeneous Firms and Trade," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 1-54, Elsevier.
    6. Hillberry, Russell & Hummels, David, 2013. "Trade Elasticity Parameters for a Computable General Equilibrium Model," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1213-1269, Elsevier.
    7. Bas, Maria & Mayer, Thierry & Thoenig, Mathias, 2017. "From micro to macro: Demand, supply, and heterogeneity in the trade elasticity," Journal of International Economics, Elsevier, vol. 108(C), pages 1-19.
    8. Esposito, Federico, 2022. "Demand risk and diversification through international trade," Journal of International Economics, Elsevier, vol. 135(C).
    9. Bolatto, Stefano & Moramarco, Graziano, 2023. "Gains from trade and their quantification: Does sectoral disaggregation matter?," International Economics, Elsevier, vol. 174(C), pages 44-68.
    10. Fernandes,Ana Margarida & Klenow,Peter J. & Meleshchuk,Sergii & Pierola,Martha Denisse & Rodriguez-Clare,Andres, 2018. "The Intensive Margin in Trade," Policy Research Working Paper Series 8625, The World Bank.
    11. Edward J. Balistreri & David G. Tarr, 2022. "Welfare gains in the Armington, Krugman and Melitz models: Comparisons grounded on gravity," Economic Inquiry, Western Economic Association International, vol. 60(4), pages 1681-1703, October.
    12. Raphael Auer, 2009. "Product Heterogeneity, Within-Industry Trade Patterns, and the Home Bias of Consumption?," Working Papers 09.05, Swiss National Bank, Study Center Gerzensee.
    13. Peter Egger & Reto Foellmi & Ulrich Schetter & David Torun, 2023. "Gravity with History: On Incumbency Effects in International Trade," Growth Lab Working Papers 219, Harvard's Growth Lab.
    14. Föllmi, Reto & Schetter, Ulrich & Torun, David, 2022. "Gravity with History: On the Aggregate Implications of Incumbency Effects in International Trade," VfS Annual Conference 2022 (Basel): Big Data in Economics 264136, Verein für Socialpolitik / German Economic Association.
    15. di Giovanni, Julian & Levchenko, Andrei A., 2013. "Firm entry, trade, and welfare in Zipf's world," Journal of International Economics, Elsevier, vol. 89(2), pages 283-296.
    16. Pol Antràs & Davin Chor, 2021. "Global Value Chains," NBER Working Papers 28549, National Bureau of Economic Research, Inc.
    17. Flach, Lisandra & Unger, Florian, 2022. "Quality and gravity in international trade," Journal of International Economics, Elsevier, vol. 137(C).
    18. Zeynep Akgul & Nelson B Villoria & Thomas W Hertel, 2016. "GTAP-HET: Introducing Firm Heterogeneity into the GTAP Model," Journal of Global Economic Analysis, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, vol. 1(1), pages 111-180, June.
    19. Treb Allen & Costas Arkolakis & Yuta Takahashi, 2020. "Universal Gravity," Journal of Political Economy, University of Chicago Press, vol. 128(2), pages 393-433.
    20. Raphael A. Auer, 2009. "Taste Heterogeneity, Trade, and the Within-Industry Home Market Effect," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 145(IV), pages 387-403, December.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • D57 - Microeconomics - - General Equilibrium and Disequilibrium - - - Input-Output Tables and Analysis
    • F10 - International Economics - - Trade - - - General
    • I30 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:apk:doctra:1602. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Departamento de Investigación Económica (email available below). General contact details of provider: https://edirc.repec.org/data/bccrrcr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.