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Understanding Interstate Trade Patterns

  • Hakan Yilmazkuday

    ()

    (Department of Economics, Florida International University)

This paper models and estimates bilateral trade patterns of U.S. states in a CES framework and identi?es the elasticity of substitution across goods, elasticity of substitution across varieties of each good, and the good-speci?c elasticity of distance measures by using markup values obtained from the production side. Compared to empirical international trade literature, the elasticity of substitution estimates are lower across both goods and varieties, while the elasticity of distance estimates are higher. Although home-bias effects at the state level are signi?cant, there is evidence for decreasing effects over time.

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File URL: http://casgroup.fiu.edu/pages/docs/3501/1311369363_11-04.pdf
File Function: First version, 2011
Download Restriction: no

Paper provided by Florida International University, Department of Economics in its series Working Papers with number 1104.

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Length: 26 pages
Date of creation: Jul 2011
Date of revision:
Handle: RePEc:fiu:wpaper:1104
Contact details of provider: Postal: Miami, FL 33199
Phone: (305) 348-2316
Fax: (305) 348-1524
Web page: http://economics.fiu.edu

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