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Specialization and the volume of trade: do the data obey the laws?

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  • James Harrigan

Abstract

The core subjects of trade theory are the pattern and volume of trade: which goods are traded by which countries, and how much of those goods are traded. The first part of this paper discusses evidence on comparative advantage, with an emphasis on carefully connecting theoretical models with data analyses. The second part of the paper considers the theoretical foundations of the gravity model and reviews the small number of studies that have tried to test, rather than simply use, the implications of gravity. Both parts of the paper yield the same conclusion: we are still in the very early stages of empirically understanding specialization and the volume of trade, but the work that has been done can serve as a starting point for further research.

Suggested Citation

  • James Harrigan, 2001. "Specialization and the volume of trade: do the data obey the laws?," Staff Reports 140, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednsr:140
    Note: For a published version of this report, see James Harrigan, "Specialization and the Volume of Trade: Do the Data Obey the Laws?" in Kwan Choi and James Harrigan, eds., Handbook of International Trade. Oxford: Basil Blackwell: 85-118.
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    More about this item

    Keywords

    comparative advantage; International trade; gravity model; specialization;
    All these keywords.

    JEL classification:

    • F1 - International Economics - - Trade

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